Suzlon Energy Ltd VS Commercial Tax Officer

Two writ petitions have been brought before the Admission Board of this Writ Court. Representing the writ petitioner-Company in both petitions is Mr. Raghavan Ramabadran from the law firm M/s. Lakshmi Kumaran and Sridharan Attorneys. The petitioner-Company is the same in both cases. Additionally, Mr. J. Kumaran, the learned Additional Government Pleader, is also appearing before this Court.

In the admission board before the Writ Court, two writ petitions were presented. Mr. Raghavan Ramabadran from the law firm Lakshmi Kumaran and Sridharan Attorneys represented the writ petitioner company, which is the same company for both petitions. Additionally, Mr. J. Kumaran, the learned Additional Government Pleader from Puducherry, accepted the notice on behalf of all three respondents in both writ petitions.

These writ petitions arise under the Central Goods and Services Tax Act, 2017 (C-G & ST Act) and pertain to the refund of accumulated Input Tax Credit (ITC). The ITC accumulation in this case results from what is known in revenue terminology as an ‘inverted tax structure.’ Due to the limited scope of these writ petitions and with the consent of the learned counsel on both sides, the main writ petitions were taken up and heard out by the court.

Two writ petitions have come before the Admission Board of this Writ Court. Mr. Raghavan Ramabadran from the law firm Lakshmi Kumaran and Sridharan Attorneys represents the writ petitioner-company, which is the same entity in both petitions. Mr. J. Kumaran, the learned Additional Government Pleader for Puducherry, has accepted notice on behalf of all three respondents in both writ petitions.

The petitions arise under the Central Goods and Services Tax Act, 2017 (C-G & ST Act) and concern the refund of accumulated Input Tax Credit (ITC). This accumulation results from what is referred to as an ‘inverted tax structure,’ where the tax rate on inputs procured by the petitioner is higher than the tax rate on the final product supplied by the petitioner. In this case, the petitioner is a manufacturer and supplier of wind-operated electricity generators and their parts. Due to the inverted tax structure, the petitioner accumulated ITC and subsequently applied for a refund under Section 54 of the C-G & ST Act to the first respondent, the Original Authority.

Given the limited scope of the petitions and with the consent of the counsel on both sides, the main writ petitions were taken up and heard.

The Admission Board of the Writ Court is currently hearing two writ petitions filed by a company represented by Mr. Raghavan Ramabadran of M/s. Lakshmi Kumaran and Sridharan Attorneys. The Additional Government Pleader for Puducherry, Mr. J. Kumaran, is representing the respondents. Both petitions involve the Central Goods and Services Tax Act, 2017 (C-G & ST Act) and pertain to the refund of accumulated Input Tax Credit (ITC) due to an inverted tax structure.

The petitioner is a manufacturer and supplier of Wind Operated Electricity Generators and their parts. The tax rate on the inputs procured by the petitioner was higher than that on the supplied product, leading to accumulated ITC. Consequently, the petitioner applied for a refund under Section 54 of the C-G & ST Act to the Original Authority, which rejected the claim through two separate orders dated January 6, 2020.

The petitioner appealed under Section 107 of the C-G & ST Act to the Appellate Authority, which allowed the appeals through orders dated July 22, 2022, and July 28, 2022. The Appellate Authority upheld the petitioner’s entitlement to the refund and directed the Original Authority to sanction it. The writ petitions are now being heard to address the implementation of these orders.

In the current session, two writ petitions are presented before the Admission Board of the Writ Court. Mr. Raghavan Ramabadran from the law firm Lakshmi Kumaran and Sridharan Attorneys represents the writ petitioner-company in both petitions, while Mr. J. Kumaran, the learned Additional Government Pleader for Puducherry, represents the respondents.

These writ petitions concern the ‘Central Goods and Services Tax Act, 2017’ (C-G & ST Act) and specifically deal with the refund of accumulated ‘Input Tax Credit’ (ITC), resulting from what is known as an ‘inverted tax structure’. Given the narrow scope of these petitions and with mutual consent, the main petitions were heard directly.

The essential facts are as follows: The petitioner manufactures and supplies Wind Operated Electricity Generators and their parts. For one such part, the input taxes paid by the petitioner exceeded the tax rate on the final product, leading to an accumulation of ITC. Consequently, the petitioner applied for a refund under Section 54 of the C-G & ST Act to the Original Authority (first respondent). The Original Authority rejected the refund claim in two separate orders dated 06.01.2020. The petitioner appealed this decision under Section 107 of the C-G & ST Act to the Appellate Authority (second respondent). The Appellate Authority, in two separate orders dated 22.07.2022 and 28.07.2022, allowed the appeals, granted the refund claims, and directed the Original Authority to sanction the refund.

Following this, the petitioner submitted a second set of refund applications on 05.08.2022. Due to delays in processing these applications, the petitioner sent reminders on 14.11.2022. The lack of response to these reminders led to the filing of the current writ petitions, which seek a mandamus order directing the first respondent to address the representations dated 14.11.2022 and implement the Appellate Authority’s orders from 22.07.2022 and 28.07.2022. The State Counsel, representing all three respondents, noted that the State is currently considering the situation.

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