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TMI Blog2022 (9) TMI 420X X X X Extracts X X X X X X X X Extracts X X X X ..... han the rate of tax on inputs (same goods) at the same point of time as per some concessional notification issued by the Government providing for lower rate of tax for some specified supplies subject to fulfilment of other conditions. The Circular dated 06.07.2022 is clarificatory in nature whereby paragraph 3.2 of the Circular dated 31.03.2020 has been substituted as supra. Being clarificatory, Circular dated 06.07.2022 inserting the above clarification would have the effect from the date when Circular dated 31.03.2020 came into effect - If this be the position, then the claim of the petitioner is liable to be re-considered on the basis of the Circular dated 31.03.2020 as clarified by the Circular dated 06.07.2022. The matter is rema ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 54(3)(ii) of the CGST Act, 2017 to the extent that it seeks to reject the refund of accumulated unutilized tax credit in cases where the input output supplies are the same; and c) Consequently, Direct the Respondents and more particularly Respondent No.5 6 to refund the amount of Rs.77,91,857/- under inverted tax structure in terms of Section 54 of CGST Act, 2017 read with appropriate CGST Rules, 2017 to the Petitioner, in the interests of justice and d) Award costs to the Petitioner; and e) For such further and other reliefs, as this Hon'ble Court may deem fit and proper in the nature and circumstances of the case may require. 3. Petitioner is a proprietary concern established in the year 2005 engaged in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... firmed the rejection order dated 04.01.2021 and dismissed the appeal. 7. Aggrieved thereby, the present writ petition came to be filed. 8. Learned counsel for the petitioner submits that the Board has issued a clarificatory Circular dated 06.07.2022 clarifying paragraph 3.2 of the Circular dated 31.03.2020 relied upon by respondent Nos.6 and 5 while rejecting the refund application of the petitioner. Therefore, in view of the changed circumstances, respondents may be directed to allow the refund application. 8.1. Learned counsel appearing for respondent Nos.2 and 4 to 6 however submits that respondent Nos.5 and 6 had taken the decision on the basis of the existing Circular of the Board. Therefore, such decision of the Board cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This order of respondent No.6 was affirmed in appeal by respondent No.5 vide the order dated 09.04.2021. 11. At this stage, we may advert to para 3.2 of the Board s Circular dated 31.03.2020 which reads as under:- Refund of accumulated ITC in terms of clause (ii) of sub-section (3) of section 54 of the CGST Act is available where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies. It is noteworthy that, the input and output being the same in such cases, though attracting different tax rates at different points in time, do not get covered under the provisions of clause (ii) of sub-section (3) of section 54 of the CGST Act. It is hereby clarified that refund of accumula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that in such cases, refund of accumulated input tax credit on account of inverted structure would be allowed in cases where accumulation of input tax credit is on account of rate of tax on output supply being less than the rate of tax on inputs (same goods) at the same point of time as per some concessional notification issued by the Government providing for lower rate of tax for some specified supplies subject to fulfilment of other conditions. Consequently, paragraph 3.2 of the Circular dated 31.03.2020 has now been substituted by the Circular dated 06.07.2022 as under:- 3.2 It may be noted that refund of accumulated ITC in terms of clause (ii) of first proviso to sub-section (3) of section 5.4 of the CGST Act is available where th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the date when Circular dated 31.03.2020 came into effect. 15. If this be the position, then the claim of the petitioner is liable to be re-considered on the basis of the Circular dated 31.03.2020 as clarified by the Circular dated 06.07.2022. 16. Consequently, we set aside the orders dated 04.01.2021 of respondent No.6 and dated 09.04.2021 of respondent No.5. The matter is remanded back to respondent No.6 for re-consideration in terms of the Circular dated 06.07.2022 as extracted above. Let the above exercise on remand be carried out by respondent No.6 within a period of eight weeks from the date of receipt of a copy of this order. 17. Writ petition is accordingly allowed. Miscellaneous applications pending, if any, shall stand ..... X X X X Extracts X X X X X X X X Extracts X X X X
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