SC Dismisses SLP | Amendment to Rule 89(5) Applies Retrospectively

Case Details: Union of India Versus Tirth Agro Technology Pvt. Ltd. (2025) 33 Centax 114 (S.C.)

Judiciary and Counsel Details

• Manoj Misra & Ujjal Bhuyan, JJ.
• S/Shri N. Venkataraman, A.S.G., Gurmeet Singh Makker, AOR,V.C. Bharathi, Digvijay Dam, Ms Prerna Dhal and Gautam Kumar, Advs. for the Petitioner.

Facts of the Case

The petitioners had filed refund applications under section 54 of the CGST Act and the Gujarat GST Act on account of inverted duty structure, which were granted on the basis of the formula then existing under Rule 89(5) of the CGST Rules and Gujarat GST Rules. Subsequently, the formula was amended vide ‘Notification No. 14/2022-Central Tax, dated 05-07-2022’, and on that basis the petitioners filed rectification applications seeking differential refund under the amended formula. The claims were rejected on the ground that refund had already been granted as per the old formula and that the amendment was prospective in nature. The jurisdictional authority relied on ‘Circular No. 181/22, dated 10-11-2022’, which clarified that the amendment was not clarificatory and would apply only prospectively. The High Court, relying upon its decision in ‘Ascent Meditech Ltd. v. UOI 2025 (93) G.S.T.L. 85/(2024) 24 Centax 405 (Guj.)’, held that such rejection was unsustainable and that the amended Rule 89(5) was curative and clarificatory in nature, thereby applying retrospectively. It was further held that ‘Circular No. 181/22, dated 10-11-2022’, to the extent it denied such retrospective application, was contrary to law, and that rectification applications filed within the prescribed period of two years were maintainable. The matter was accordingly placed before the Supreme Court by way of Special Leave Petition. 

Supreme Court Held

The Hon’ble Supreme Court held that the very decision of the Gujarat High Court in Ascent Meditech Ltd. v. UOI, which had been relied upon by the High Court to grant relief in the present matter, had already been challenged by the Union of India in ‘Union of India v. Ascent Meditech Ltd., (2025) 29 Centax 78 (S.C.)’, and the Special Leave Petition therein was dismissed. Since the said decision had attained finality, the Court found no ground for interference. The SLP was accordingly dismissed. The ruling affirms that the amendment to Rule 89(5) introduced by ‘Notification No. 14/2022-Central Tax, dated 05-07-2022’ is curative and clarificatory in nature, thereby operating retrospectively, and ensures that refund claims or rectification applications filed within the limitation period under section 54(1) will be governed by the amended formula, providing certainty and uniformity in refund adjudication under inverted duty structure. 

List of Cases Reviewed

• Tirth Agro Technology Pvt. Ltd. v. Union of India — (2025) 33 Centax 18 / [2025] 176 taxmann.com 793 (Guj.) — SLP Dismissed [Para 3]

List of Cases Cited

• Ascent Meditech Ltd v. Union of India — 2025 (93) G.S.T.L. 85/(2024) 24 Centax 405 (Guj.) — Referred [Para 2]
• Union of India v. Ascent Meditech Ltd — (2025) 29 Centax 78 (S.C.) — Referred [Para 2]