Facts of the Case: In this case, the petitioner filed a writ petition, challenging the inaction of the State authorities in granting refund pursuant to an assessment order dated 01.10.2022 for the financial year 2017–18. By the said order, the assessing authority directed refund of ₹5 crores, subject to the principle of unjust enrichment.
The taxability of ENA (Extra Neutral Alcohol) had already been settled by the Division Bench of the Allahabad High Court in Jain Distillery Pvt. Ltd. v. State of U.P. (2021 (10) ADJ 69), wherein it was held that the State of U.P. lost legislative competence to levy UPVAT on ENA after the 101st Constitution Amendment. The Notification dated 17.12.2019, insofar as it sought to impose UPVAT on ENA, Rectified Spirit and SDS, was ultra vires for lack of legislative competence and valid delegation. Refund of any amount deposited as UPVAT on ENA after 01.07.2017 was directed, subject to unjust enrichment.
In this case, the State Government filed an SLP before the Supreme Court, but no stay was granted on the High Court judgment. Despite this, the refund claim of the petitioners was rejected vide order dated 19.07.2025, leading to the present writ petition.
Issue: Whether the State authorities can legally refuse refund to the petitioner on the ground of pendency of an SLP before the Supreme Court, when no stay order has been granted against the judgment of the High Court directing refund.
Held that: The Court reiterated that unless a superior Court grants a stay, the judgment of the High Court continues to bind all authorities within the State. The pendency of an SLP is not a ground to ignore or postpone compliance. Any judgment of the Allahabad High Court applies throughout the State of U.P., and the authorities are duty-bound to act in conformity with it.
The retention of amounts collected as UPVAT on ENA post–01.07.2017 was held unconstitutional, being without authority of law. Since the liability had been passed on to the buyer, refund was directed to be made to the buyer under Section 43 of the UPVAT Act, 2008, subject to furnishing an indemnity bond.
The rejection order was quashed and refund was directed in favour of the petitioner.
Case Name: M/s Dcm Shriram Industries Ltd And Another Versus State of U.P. and Another dated 25.09.2025
To read the complete judgement 2025 Taxo.online 2508
