Case Details: MK Agrotech Pvt. Ltd. Versus Union of India (2025) 32 Centax 479 (Kar.)
Judiciary and Counsel Details
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Suraj Govindaraj, J.
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Smt. Meghna Lal, Smt. Vani Dwevidi and Shri Ravi Raghavan, Advs. for the Petitioner.
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Shri Jeevan J. Neeraligi, Adv. for the Respondent.
Facts of the Case
The petitioner, a manufacturer and dealer of refined vegetable oil, challenged the revisionary order passed under CGST and Karnataka GST, whereby refund of input tax credit (ITC) under the inverted duty structure was restricted. Although ITC had initially been sanctioned, the revisionary authority restricted the refund to the tax rate applicable on the principal input, namely crude sunflower oil. The petitioner contended that for the purpose of manufacturing refined sunflower oil, other ingredients and inputs were also made use of, and therefore, refund of ITC in respect of those items was also admissible. It was submitted that restricting the refund solely on the basis of the principal input’s tax rate was contrary to the scheme of Section 54 of the CGST Act and Karnataka GST Act, read with Rule 89 of the CGST Rules and Karnataka GST Rules. The matter was accordingly placed before the High Court.
High Court Held
The High Court held that in cases involving multiple inputs, refund of unutilised ITC under the inverted duty structure cannot be denied merely because the tax rate of the principal input is not higher than that of the principal output. It relied upon the decision in Indian Oil Corporation Ltd. v. Assistant Commissioner of Central Tax (2025) 29 Centax 452 (Kar.), and held that the legal principle laid down therein squarely applied to the present case. The Court allowed the writ petition and issued a writ of certiorari quashing the impugned revisionary order.
List Of Cases Cited
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Indian Oil Corporation Ltd. v. Asstt. Commissioner of Central Tax — (2025) 29 Centax 452 (Kar.) — Referred [Para 7]
