Lupin Limited Nagpur v. State of Maharashtra

Order

NOVEMBER 14, 2025.DATE OF PRONOUNCING THE ORDER: NOVEMBER 21, 2025.The petitioner – Company has approached this Court withfollowing substantive prayer:“i.that this Hon'ble Court be pleased to issue a Writ ofCertiorari or a writ in the nature of Certiorari or any otherwrit, order or direction under Article 226 of theConstitution of India calling for the records pertaining tothe Petitioner's case and after going into the validity andlegality thereof to quash and set aside the three impugnedRefund Rejection Orders dated 17.01.2022 passed by theRespondent No. 6, the impugned Refund Rejection Orderdated 04.08.2023 passed by the Respondent No.5, theimpugned Refund Rejection Order 07.05.2024 passed bythe Respondent No. 4 (Annexure A1 to A5), andimpugned orders-in-appeal both dated 21.06.2024 passedby the Respondent No. 3 (Annexures A6 and A7) and theimpugned order-in-appeal dated 20.06.2024 passed bythe Respondent No. 3 (Annexure A8)”2.Heard Mr. P. Shah, learned Senior Counsel for petitioner, Mr. M. I. Dhatrak, learned counsel for respondent Nos. 1 to 7 andMr.P. V. Navlani, learned counsel for respondent No.8. Perused theimpugned orders passed by respondent Nos. 3 to 6.3.The refund applications filed by petitioner were rejectedon the ground that in terms of provisions of the Maharashtra Goods

wp4164.24and Service Tax Act, 2017 (“MGST Act”) and the Central Goods andServices Tax Act, 2017 (“CGST Act”) read with Rules of CGST Act andSection 16(3) of the Integrated Goods and Service Tax Act, 2017(“IGST Act”), the supplier of services to the Special Economic Zones(“SEZ”) Unit can only file the refund application.4.In the present case, the refund applications were filed bythe petitioner which, admittedly, is a SEZ Unit. The appellateauthority observed that under the aforesaid provision, there is no baror restriction either on availing ISD credit by a SEZ Unit or onclaiming refund of such ISD credit availed. However, the refund wasrejected for following reasons :“Proviso to Rule 89(1) restricts the claim of refund tothe extent of supplier to the Special economic zone andstipulates that only the supplier of goods or services canfile the refund claim after due endorsement by theSpecified Officer of the SEZ for receipt of goods infull/receipt of services with evidence, for authorizedoperations. Further regarding the judgment referred by appellantin case of M/s Britannia Industries Ltd versus Union ofIndia, it is observed that, as there is a law point, abovematter has been appealed before Hon'ble Apex Court andSpecial leave petition has been filed, which is admitted bythe Hon'ble Apex Court and litigation are going on and thematter is pending in the form of SLP No.13431 of 2021before the Hon'ble Apex Court. In view of this, this officehas earlier kept this matter sine die till the pronouncementof judgment by the Hon’ble Apex court, against whichappellant has requested for early disposal of the matter. Therefore, in view of facts discussed above, Officersview point is confirmed at this stage, Appellant is notentitled for refund of the ITC as the appellant is a SEZ unitand in view of the provision of section 54 of the CGST Actread with Rule 89 of the Central Goods and Service TaxRules,2017 (for short 'CGST Rules') only a supplier ofgoods or services can file an application for refund and notrecipient of the services. As in the facts of the case, theappellant is a recipient of service; the appellant is notentitled to apply for the refund under the provisions of theCGST Act read with the CGST Rules. (3) wp4164.24Furthermore, there is no circular, notification orguidelines issued by the Government or Central Board ofIndirect Taxes and Customs to process the input tax creditrefund claims of the units located in the SEZ and therefore, the competent authority has rightly rejected the claim ofthe refund made by the appellant by passing the impugnedorder.”5.Thus the appellate authority refused to follow the law laiddown by the Gujarat High Court in the case of Britannia IndustriesLtd. Vs. Union of India; [2020 (42) GSTL 3 (Guj.)] only because thejudgment was challenged before the Apex Court and the petition waspending.6.Mr. Shah, learned Senior Counsel for the petitioner, submits that the Supreme Court has disposed of the petition as notpressed for orders on the ground of low tax effect. Mr. Shah has theninvited our attention to another order of Hon’ble Supreme Courtpassed in Special Leave Petition between Union of India and Ors. .Vs.Messers Meghmani Organochem Ltd. and anr. [S.L.P. (C)No.1239/2025, decided on 22.09.2025], wherein another judgmentof Gujarat High Court was challenged. The judgment, that waschallenged was rendered in terms of law laid down in Britannia’s casesupra. The Hon’ble Supreme Court on 22.09.2025, disposed of thepetition in following terms:“1. The High Court relying on its decision rendered inthe case of "Britannia Industries Limited vs. Union of India"reported in 2020 G.S.T.L. 3 (Guj) accepted the argumentscanvassed on behalf of the respondent herein-originalpetitioner that an SEZ Unit is entitled in law to claim therefund of unutilised ITC accumulated under Rule 89 ofCGST Rules on the ground that exports are made withoutpayment of tax under LUT.2.Mr. Chandrashekhara Bharathi, the learned counselappearing for the revenue submitted that BritanniaIndustries Limited (supra) was challenged before thisCourt, however, the challenge failed on the ground of lowtax effect. He would submit that it is only the supplier who (4) wp4164.24could have preferred the application claiming a refund ofthe unutilised IT accumulated under Rule 89 of the CGSTRules and not the SEZ Unit.3. In the peculiar facts and circumstances of the caseand having regard to the amount which has been orderedto be refunded, we are not inclined to interfere with theimpugned order. However, the question of law is keptopen.4. The Special Leave Petition is, accordingly, dismissed.5. Pending application(s), if any, stands disposed of.”7.As could be seen, the Supreme Court has disposed of thepetition by keeping the question of law open.8.Considering the above, the status as of now is that the lawlaid down by the Gujarat High Court in Britannia’s case holds thefield. The Bombay High Court in the case of Commissioner ofIncome Tax Vidarbha & Marathwada, Nagpur Vs. Smt. GodavarideviSaraf [1978 (2) ELT (J 624) (Bom)], held that the law declared by aHigh Court, though of another State, is a binding law of the land andall authorities like a Tax Tribunal acting anywhere in the country arebound by it, until a contrary decision is given by any other HighCourt.9.Accordingly, Mr. Shah argued, and rightly so, thatrespondent Nos.3 to 6 are bound by the law laid down in Britannia’scase. Having failed to consider the refund applications filed by thepetitioner in terms of the Britannia’s case, the impugned orders areliable to be set aide.10.At this stage, learned A.G.P. submits that in terms ofSection 16 of the IGST Act read with Rule 89 of CGST Rules, refundof tax can be claimed by SEZ Unit if the services were for authorizedoperations as endorsed by a specified officer of the zone. In thepresent case, there is no such finding given by the authorities below. (5) wp4164.2411.As against, learned Senior Counsel for petitioner submitsthat this point was never raised before the authorities below and, therefore, the petitioner had no opportunity to deal with the same.12.That being so, we are of the considered view that thismatter will have to be remanded back to respondent No.6 - AssistantCommissioner of the State Tax, to pass orders afresh, in the light ofthe law laid down in Britannia’s case and after examining whetherthe services under question were for authorized operations asendorsed by the specified officer of the zone.13.The petition is accordingly partly allowed. Impugnedorders dated 17.01.2022, 04.08.2023 and 07.05.2024 passed byrespondent Nos. 6, 5 and 4 respectively as also orders in appeal dated21.06.2024 and 20.06.2024 passed by respondent No.3, are quashedand set aside. The matter is remanded back to respondent No.6 forconsideration afresh, in accordance with law and in terms of whathas been stated above. The parties shall appear before respondent No.6 on08.12.2025.(JUDGE)(JUDGE)Kahale