Refund of ITC Allowed for Pre-Notification Period Despite Later Restriction

Case Title: Ramcharan Food Industries Pvt. Ltd. v. Assistant Commissioner & Others
Court: High Court of Andhra Pradesh, Amaravati
Petition No.: Writ Petition No. 6808 of 2025
Date of Judgment: 30 April 2025
Coram: Justice R. Raghunandan Rao and Dr. Justice Y. Lakshmana Rao
Category of Dispute: Refund – Inverted Duty Structure
Relevant Sections: Section 54 of CGST Act, 2017; Rule 89 of CGST Rules, 2017
Relevant Notifications/Circulars: Notification No. 9/2022-CT dated 13.07.2022 (effective 18.07.2022), CBIC Circular No. 181/13/2022-GST dated 10.11.2022

Facts of the Case (Para 1–2)

• The petitioner, Ramcharan Food Industries Pvt. Ltd., dealing in edible oils, applied on 17.03.2023 for refund of unutilized ITC accumulated due to inverted duty structure for the period July 2021 – November 2022.

• The refund claim was rejected on 25.04.2023 by the Assistant Commissioner citing Notification No. 9/2022-CT and CBIC Circular No. 181/13/2022-GST, which barred refunds under inverted duty from 18.07.2022 onwards.

• The petitioner’s appeal before the appellate authority was dismissed on 22.04.2024.

Question(s) in Consideration (Para 3)

• Whether refund of unutilized ITC under inverted duty structure is barred even for ITC accrued prior to 18.07.2022 when the refund application was filed after that date.

Observations of the Court (Para 3–4)

• The Court relied on its earlier judgment in W.P. No. 5253 of 2023 & batch (29.01.2025), where it was held that Notification No. 9/2022 must be interpreted to restrict refunds only for periods after 18.07.2022.

• Refund claims could be filed either before or after 18.07.2022, but entitlement exists only for ITC accrued before the cut-off date.

• Authorities cannot deny refund for the pre-18.07.2022 period merely because the application was made after that date.

Judgment of the Court (Para 4–5)

• The rejection order (25.04.2023) and appellate order (22.04.2024) were set aside.

• The Assistant Commissioner was directed to reconsider the refund claim, limiting eligibility only to ITC accrued before 18.07.2022, subject to verification.

• Writ Petition was disposed of with no order as to costs.

Between Fine Lines (Simplified Outcome)

1. Refund of ITC on inverted duty structure is permissible for ITC accrued before 18.07.2022.

2. Refund applications filed after the cut-off date cannot be denied if the credit relates to pre-notification period.

3. The CBIC circular cannot override substantive rights accrued before the restriction date.

4. Both rejection and appellate orders were struck down.

5. Refund restricted only to ITC till 17.07.2022, subject to departmental verification.

Summary of Referred Cases

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