The restrictions on refund of accumulated input tax credit under Notification No. 9/2022 apply prospectively only, allowing claims for periods prior to the notification while filed within the statutory time limit.

JUDGMENT :

PRANAV TRIVEDI, J.

1. Heard learned advocate Mr. Nirav Shah for the petitioners and learned advocate Mr. Ankit Shah for the respondents.

2. Rule, returnable forthwith. Learned advocate Mr. Ankit Shah waives service of notice of rule for and on behalf of the respondents.

3. Having regard to the controversy involved in this petition, with the consent of the learned advocates for the respective parties, the matter is taken up for final hearing.

4. Present petition preferred under Article 226 of the Constitution of India assails the correctness and validity of order dated 29.2.2024 as well as order dated 31.3.2023 passed by the Assistant Commissioner, Central Goods & Service Tax and Excise, Division-VIII (Anand), Vadodara-1 (hereinafter referred to as ‘the respondent’ for short) wherein the respondent was pleased to reject the refund application preferred by the petitioners under Section 54 of the Central Goods & Service Tax Act, 2017 (hereinafter referred to as ‘the CGST’ for short.

5. The facts leading to the filing of the present petition are as under:

5.1 The petitioners are in business of manufacturing and trading of edible oil, cattle feed, palmolein oil, mustard oil, etc. The products of the petitioners are classified under Chapter-15 of the Customs Tariff Act, 1975 (hereinafter referred to as ‘the Tariff Act’ for short). As per the Tariff Act, the products of the petitioners attract 5% rate of GST. It is the case of the petitioners that the raw materials for manufacturing aforesaid products are received attracting higher rate of tax under the provisions of the Act. Therefore, the petitioners have always availed accumulation of Input Tax Credit (for short ‘ITC’) due to inverted tariff structure. It is the case of the petitioners that as per Section-54(3) of the CGST Act, the petitioners can avail refund of the aforesaid accumulated credit.

5.2 It is the case of the petitioners that the Department had issued Notification No. 5/2017 dated 28.06.2017 under Section 54 (3)(ii) restricting refund of unutilized input tax credit in case of goods mentioned in the notification. The products belonging to the petitioners were not mentioned in Table of Notification dated 28.6.2017. Therefore, the petitioners were entitled to get refund of accumulated ITC under Section 54 (3)(ii). Subsequently, another Notification being Notification No. 9/2022 dated 13.07.2022 came to be issued by the Department wherein the products belonging to the petitioners were notified as not being eligible for refund of accumulated ITC. It is the case of the petitioners that Notification No. 9/2022 was made effective from 18.07.2022 and, therefore, the petitioners had filed various refund applications for the period prior to 18/07/2022. The refund applications were made on 23/01/2023. Pursuant to the Refund Applications preferred by the petitioners, the respondent had issued show-cause notice for rejection of the refund applications. The petitioners could not represent their case before the adjudication authority. Therefore, by way of order dated 31.3.2023 the refund application was rejected ex-parte.

5.3 Being aggrieved by order dated 31.3.2023, the petitioner preferred an appeal before the appellate authority. By way of impugned order dated 29.2.2024, the appeal preferred by the petitioners was dismissed on merits. Being aggrieved by the impugned orders dated 31.3.2023 and 29.2.2024, the petitioners have preferred the present writ petition.

6. Heard learned advocate Mr. Nirav Shah for the petitioners and learned advocate Mr. Ankit Shah for the respondent.

7. It was submitted by learned advocate Mr. Nirav Shah for the petitioners that the petitioners had filed refund applications u/s. 54 of the CGST Act. As per section-54(1), an application fo