M/S. Malabar Fuel Corporation vs. The Assistant Commissioner Of C Entral Tax & Central Excise
Held
The Kerala High Court, following its own Division Bench judgment and other High Court rulings, held that paragraph 3.2 of Circular No. 135/05/2020-GST, which denies refund of accumulated ITC under an inverted duty structure when input and output goods are the same, is contrary to Section 54(3)(ii) of the CGST Act. The Court set aside the rejection orders and directed reconsideration.
Facts
M/s. Malabar Fuel Corporation, engaged in LPG bottling, sought refund of accumulated Input Tax Credit (ITC) due to an inverted duty structure (18% GST on bulk LPG input, 5% on domestic bottled LPG output). Their refund applications were rejected by the authorities, citing Circular No. 135/05/2020-GST.
Key Issues
Whether refund of accumulated Input Tax Credit under an inverted duty structure can be denied based on Circular No. 135/05/2020-GST, which stipulates that input and output supplies must be different for such a refund, even if the tax rates differ.
Sections Cited
Section 54(3)(ii) of the Central Goods and Services Tax Act, 2017, 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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