M/S. Malabar Fuel Corporation vs. The Assistant Commissioner
Held
The High Court held that paragraph 3.2 of Circular No. 135/05/2020-GST, which denies refund of accumulated ITC on the ground that input and output supplies are the same despite different tax rates, is contrary to Section 54(3)(ii) of the CGST Act. The Court noted that other High Courts had already taken a similar view. Consequently, the impugned orders rejecting the refund claims were set aside.
Facts
M/s. Malabar Fuel Corporation, engaged in bottling LPG, paid 18% GST on bulk LPG (input) but charged 5% GST on domestic LPG cylinders (output), leading to accumulated Input Tax Credit (ITC). Their refund applications for this accumulated ITC were rejected by the authorities, citing Circular No. 135/05/2020-GST.
Key Issues
Whether refund of accumulated Input Tax Credit (ITC) can be denied under Section 54(3)(ii) of the CGST Act based on Circular No. 135/05/2020-GST when the input and output goods are essentially the same but subject to different GST rates.
Sections Cited
Section 54(3)(ii) CGST Act, Circular No. 135/05/2020-GST
AI-generated summary — verify with the full judgment below
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH THURSDAY, THE 11TH DAY OF JANUARY 2024 / 21ST POUSHA, 1945 WP(C) NO. 26112 OF 2023 PETITIONER/S: M/S. MALABAR FUEL CORPORATION 358, ELEMBERAPARA, ARAMVAYAL ROAD, KOOVERY, KANNUR, PIN – 670142, REPRESENTED BY ITS MANAGING PARTNER, SALEEM KUNJIKKANDY, BY ADVS. HARISANKAR V. MENON MEERA V.MENON R.SREEJITH K.KRISHNA PARVATHY MENON RESPONDENT/S: 1 THE ASSISTANT COMMISSIONER CENTRAL TAX AND CENTRAL EXCISE, KANNUR DIVISION, CENTRAL REVENUE BUILDING, KUZHIKUNNU, KANNUR, PIN - 670001 2 THE JOINT COMMISSIONER (APPEALS) OFFICE OF COMMISSIONER (APPEALS), CENTRAL TAX, CENTRAL EXCISE AND CUSTOMS, CGST DEPARTMENT, C.R. BUILDING, IS PRESS ROAD, KOCHI, PIN - 682018 3 UNION OF INDIA REPRESENTED BY SECRETARY TO GOVERNMENT, MINISTRY OF FINANCE (DEPARTMENT OF REVENUE), NORTH BLOCK, NEW DELHI, PIN - 110001 4 STATE OF KERALA REPRESENTED BY ITS SECRETARY, TAXES DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM, PIN - 695001
WP(C) Nos.26112, 20511 & 36699/2023 2 5 CENTRAL BOARD OF INDIRECT TAXES & CUSTOMS GST POLICY WING, NORTH BLOCK, NEW DELHI, PIN - 110001, REPRESENTED BY PRINCIPAL COMMISSIONE
The judgment continues below.
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