ADM AGRO INDUSTRIES INDIA PVT LTD

VERSUS

UNION OF INDIA & ORS.

Citation:  2024 taxo.online 630 

 

The case of ADM Agro Industries India Pvt Ltd v. Union of India & Ors., heard on March 27, 2024, delves into the complex realm of GST refund claims under the Central Goods & Services Tax Act, 2017 (CGST Act). The petitioner, ADM Agro Industries India Pvt Ltd, sought the refund of accumulated input tax credit spanning from July 2017 to November 2020, a period characterized by varying tax rates on input procurement and output supply, leading to an inversion in the tax structure.

The petitioner's contention rested on Section 54(3)(ii) of the CGST Act in conjunction with Rule 89(5) of the Central Goods & Service Tax Rules, 2017 (CGST Rules), which provide for the refund of unutilized input tax credit. They argued that the discrepancy between the GST rates applicable to input procurement (ranging from 5% to 28%) and output supply (taxed at 5%) resulted in a substantial accumulation of input tax credit that warranted a refund.

To pursue their claim, the petitioner filed both manual and online refund applications, specifying the relevant periods and corresponding amounts. Initially, the respondent authorities contested the claims, citing technical glitches in the online filing system. However, they later conceded that there were no such impediments but insisted on adhering to the statutory limitation period prescribed under Section 54 of the CGST Act for processing the refund applications.

In response, the petitioner, represented by Mr. Anand Nainawati, argued for a more equitable approach, advocating for the consideration of the date of manual application filing as the relevant date for determining the limitation period. This approach, they contended, would prevent legitimate refund claims from being time-barred due to procedural technicalities.

In delivering the judgment, Honorable Justice Bhargav D. Karia upheld the petitioner's plea, directing the respondent authority to adopt the date of filing the manual refund application as the relevant date for the limitation period under Section 54 of the CGST Act. This decision empowers the petitioner to file fresh refund applications online within a specified timeframe, with the date of such applications retroactively deemed to be the date of manual filing.

Through this nuanced approach, the court balances the interests of both taxpayers and revenue authorities, ensuring that legitimate refund claims are not thwarted by procedural hurdles. The judgment underscores the court's commitment to substantive justice, upholding the rule of law while accommodating the challenges posed by digital tax administration systems. In doing so, it sets a precedent for equitable resolution of GST refund disputes, fostering confidence in the tax regime's fairness and efficiency.

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