Rajasthan High Court Quashes Refund Denial Based on Conflicting GST Circular

By: Admin | September 18, 2024 | Categories: GST Law | 3 Min Read

In the case of M/s MO Industries v. Union of India [D.B. Civil Writ Petition No. 9660 of 2024, dated July 8, 2024], the Rajasthan High Court (Jaipur Bench) quashed an order from the Appellate Authority that denied a refund based solely on *Circular No. 135/05/2020-GST, dated March 31, 2020. The court held that the circular conflicted with *Section 54(3)(ii) of the CGST Act, 2017, and could not be the basis for rejecting the refund.

Key Judgment Points:

• Circular No. 135/05/2020-GST was in conflict with *Section 54(3)(ii), which allows refunds of unutilized input tax credit (ITC) in cases of *inverted duty structures.
• The court reaffirmed that statutory provisions under the CGST Act have primacy over conflicting administrative circulars.
• The Appellate Authority’s reliance on the circular to deny the refund was erroneous, and the court set aside the order.

This ruling underscores the principle that administrative circulars cannot override statutory provisions, ensuring taxpayer rights under the GST law.

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