Case Summary
Case Title: Aqua Polymers v. Union of India & Ors.
Court: High Court of Jammu & Kashmir and Ladakh at Jammu
Petition No.: WP(C) No. 2104/2022
Date of Judgement: 04.04.2025 (Reserved on 17.03.2025)
Category of Dispute: Refund under Budgetary Support Scheme
Relevant Sections: Section 49(1) CGST Act, 2017; Section 20 of IGST Act, 2017; Notification dated 05.10.2017 (Budgetary Support Scheme); rescinded Notifications 56/2002-CE and 01/2010-CE.
Facts (Paras 1–6)
The petitioner, an industrial unit engaged in manufacturing blow molding water tanks in J&K, had earlier availed excise duty refunds under Notifications 56/2002-CE and 01/2010-CE. After rescission of these notifications, the Government introduced the Budgetary Support Scheme through Notification dated 05.10.2017, providing partial refund of CGST/IGST paid in cash.
The petitioner filed refund claims for July–Sept 2021 and Jan–March 2022, claiming amounts strictly as per the scheme. The Deputy Commissioner, CGST Division, Samba sanctioned partial refunds (Rs. 1,04,691/- and Rs. 1,38,817/-) but rejected Rs. 48,640/- and Rs. 64,496/- respectively without disclosing reasons or calculations.
Questions (Para 6–7)
The dispute centered on whether partial rejection of refunds under the Budgetary Support Scheme was legally valid when the eligibility of the unit and quantum of tax payment were undisputed.
Observations (Paras 8–15)
The Court examined para 5 of the Budgetary Support Scheme, which clearly prescribes that eligible units are entitled to 58% of CGST and 29% of IGST paid in cash, after ITC utilization. The Court noted:
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Petitioner’s eligibility was undisputed.
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Refund claims were in line with the scheme and based on actual tax paid on value addition.
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Respondents failed to disclose how they calculated the curtailed refunds.
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The rejection contradicted the scheme’s unambiguous language.
For July–Sept 2021, the petitioner paid Rs. 2,64,364/- in cash, entitling it to Rs. 1,53,331/- refund, which matched the claim. The rejection of Rs. 48,640/- was thus without basis. The same applied for Jan–March 2022.
Judgement (Paras 16–18)
The Court held that rejection of refund claims was bad in law and contrary to Notification dated 05.10.2017. Respondent No. 3 was directed to release the withheld amounts of Rs. 48,640/- and Rs. 64,496/- to the petitioner. The writ petition was disposed accordingly.
Table of Cases Referred
| Case | Court’s Verdict |
|---|---|
| No external case law cited | Not applicable |
Between Fine Lines
For industry, this judgment reinforces that authorities must adhere strictly to the Budgetary Support Scheme’s formula. Refund rejections without reasoned calculation are unsustainable. Eligible units can challenge arbitrary curtailments, ensuring continuity of financial relief promised during the GST transition.
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