IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 17298 of 2024 FOR APPROVAL AND SIGNATURE:

HONOURABLE MR. JUSTICE BHARGAV D. KARIA and HONOURABLE MR.JUSTICE D.N.RAY ==========================================================

Approved for Reporting Yes No ==========================================================

PATANJALI FOODS LTD.

Versus UNION OF INDIA & ORS.

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Appearance:

UCHIT N SHETH(7336) for the Petitioner(s) No. 1 DEEPAK N KHANCHANDANI(7781) for the Respondent(s) No. 2,3 MS HETVI H SANCHETI(5618) for the Respondent(s) No. 1,4 ==========================================================

CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA and HONOURABLE MR.JUSTICE D.N.RAY Date : 12/02/2025

ORAL JUDGMENT

(PER : HONOURABLE MR.JUSTICE D.N.RAY)

1. Heard learned Advocate Mr. Uchit N. Sheth for the petitioner and learned advocate Ms. Hetvi H. Sancheti for the respondent Nos.

1 and 4.

2. Rule returnable forthwith. Learned advocate Ms. Hetvi H. Sancheti waives service of notice of rule on behalf of the respondent Nos.1 and 4. With the consent of learned advocates for the respective parties, the matter is taken up for final hearing, as the issue involved is very short.

3. The petitioner is inter-alia, engaged in the manufacture and sale of edible oil. According to the petitioner, the rate of tax on output supplies made by the petitioner exceeds the rate of tax on input supplies. Therefore, the petitioner qualifies for refund under the inverted duty structure scheme, as per Section 54(3) of the Central/Gujarat Goods and Services Tax Act, 2017 (for short “GST Act”).

4. Notification No.9/2022-Central Tax, dated 13.07.2022, was issued by the Central Government, notifying certain goods, including edible oil, as ineligible for a refund under the inverted duty structure. The said Notification was made effective from 18.07.2022. The petitioner submitted a refund application dated 05.12.2023 for the period from February 2021 to March 2021 under Section 54(3) of the GST Act. According to the petitioner, the said refund application was within the limitation period as per Section 54(1) of the Act, read with Notification No.13/2022 dated 05.07.2022, which extended the period for filing the refund application.

5. On 27.12.2023, the petitioner received a show cause in Form GST-RFD-08 proposing to reject the refund application on the ground that there was an existing demand against the petitioner on the GST portal. The petitioner replied to the said show cause notice, pointing out that the demands had been withdrawn pursuant to the direction of the NCLT. Thereafter, the respondent accepted the petitioner’s explanation and granted the refund after passing a sanction order dated 12.01.2024.

6. Subsequently, on 25.04.2024, the respondent issued a notice under Section 73 of the Act in Form GST-DRC-01, claiming that the earlier refund of Rs.1,70,07,091/- had been erroneously granted and is liable to be recovered along with applicable interest in terms of section 50 of the Act, and applicable penalty under Section 122 of the Act.

7. The petitioner thereafter filed a detailed reply in Form GST- DRC-06 and sought a personal hearing. By way of Order-in-Original dated 10.09.2024, the respondent No.4 confirmed the demand of Rs.1,70,07,091/- towards erroneous refund and interest thereon under Section 50 of the Act, along with a further penalty of Rs.17,00,709/- .

8. Aggrieved by the aforesaid order, the petitioner has filed the present petition seeking the following reliefs :-

“A. This Hon'ble Court may be pleased to strike down and declare the impugned para 2(2) of Circular no. 181/13/2022-GST dated 10.11.2022 (annexed at Annexure A) in so far as it provides that the restriction on claim of refund as per Notification No. 9/2022- Central Tax dated 13.7.2022 will apply to all refund applications filed after the date of notification even if they pertain to prior period as being ultra-vires Section 54 of t