ORISSA HIGH COURT: CUTTACK

W.P(C) NO. 21008 OF 2022

In the matter of an application under Articles 226 and

227 of the Constitution of India.

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AFR

M/s. OMJAY EV LIMITED,

Bhubaneswar ..… Petitioner

-Versus-

Deputy Commissioner of

State Tax, CT & GST Circle,

Bhubaneswar & Ors. ….. Opp. Parties

For Petitioner :

M/s. B.P. Mohanty, N. Paikray,

R.P. Kar, A.N. Ray, S.P. Bhuyan

and S.A. Mohanty, Advocates

For Opp. Parties : Mr. Sunil Mishra,

Addl. Standing Counsel,

CT & GST Department

P R E S E N T:

THE HONOURABLE DR. JUSTICE B.R.SARANGI

AND

THE HONOURABLE MR JUSTICE M.S. RAMAN

Date of hearing:13.04.2023::Date of Judgment:19.04.2023

DR. B.R. SARANGI,J. The petitioner, by means of this writ

petition, seeks to quash the order dated 02.08.2022, by

Page 2 of 26

which the Deputy Commissioner of State Tax, CT &

GST

Circle,

Bhubaneswwar-1,

Bhubaneswar

has

rejected the refund application of the petitioner in Form

GST-RFD-06 under Annexure-10, as well as the refund

rejection order dated 02.08.2022 for the period from

December, 2021 to January, 2022 in Annexure-11, and

further to issue direction to opposite party no.1 to grant

refund as per refund application in Form GST-RFD-01

under Annexure-2 on account of Input Tax Credit

accumulated due to Inverted Tax Structure and further

to issue direction to opposite party no.1 to pay interest

on the refundable amount.

2.

The factual matrix of the case, in brief, is

that the petitioner, a holder of Goods and Services Tax

Registration Number 21AACCO7477Q1ZU under the

CGST/OGST Act, is engaged in the business of

manufacture

of

e-vehicles

in

various

processes

including chassis punching, colouring, wiring etc., and

subsequent supply thereof. The petitioner procures

domestically and imports various items with different

Page 3 of 26

HSN,

which

are

integral

part

and

parcel

of

manufacturing of e- vehicles. The petitioner procures

inputs (goods) for manufacturing of e-vehicles at

various rates, such as, 5%, 12%, 18% and 28% with

separate HSN, whereas the outward supply is of the

new product, namely, “e-vehicles" with different HSN on

which GST is leviable @ 5%. As a result of such reduced

rate of the GST on outward supply of goods, i.e., e-

vehicles, the Input Tax Credit (hereinafter referred to as

“ITC”) gets accumulated in the hands of the petitioner,

which is legally and statutorily termed as "Inverted

Duty Structure". Further, the petitioner also procures

and supplies spare parts chargeable to GST @18% and

28% to its channel partners (dealers), as they are

required to provide warranty of their products. As the

input and output rate of GST on spare parts are same,

no ITC gets accumulated in respect of spare parts.

Hence, the supply of spare parts is not treated as

inverted sales.

Page 4 of 26

2.1

During the tax period from December 2021

to January 2022, the petitioner had filed return in

GSTR-1 in respect of details of outward supplies of

goods or services and also filed return in Form GSTR-

3B in respect of details outward supplies and inward

supplies of goods or services. In accordance with the

regular practices followed by the petitioner for the

previous tax periods, i.e., filing of periodic refund

application, it filed refund application on 02.06.2022 in

respect of accumulated unutilised ITC of the input

goods

in

Form

GST-RFD-01

to

the

tune

of

Rs.1,57,92,298.00 for the period December 2021 to

January 2022 and it was issued with receipt of refund

application, i.e., Refund ARN Receipts. On 22.06.2022,

the petitioner submitted all the relevant documents in

support of its refund application claiming refund of

Rs.1,57,92,298.00 for the period December 2021 to

January 2022 in strict adherence to column no.5 of

CBIC Circular No.125/44/2019-GST dated 18.11.2019

and in the manner as prov