Allahabad HC Says GST Refund Can Be Claimed by Taxpayer, Not Just Depositor; Ambuja Cement Wins Relief
Ambuja Cement cancelled its plant contract after paying GST and sought a refund. The authorities rejected it on technical grounds. The High Court ruled that such refund claims can be made by the payer (not just the tax depositor) and ordered the case to be re-examined fairly.
The present writ petition (WRIT TAX No. 1837 of 2025), dated November 06, 2025, has been filed by M/s Ambuja Cement Limited (Petitioner) against the Union of India and 4 others (Respondents) in the Allahabad High Court. The bench was comprised of Honourable Judge Piyush Agarwal. The case was heard in the court on October 07, 2025. The petitioner challenged orders dated August 31, 2024, and August 04, 2023, passed by the respondents.
Background of Case:
The petitioner is a registered company under the GST Act, having GSTIN 09AAACG0569P1Z5, and is engaged in the business of manufacturing cement and clinker. It said that for the growth of its business expansion and for the bottleneck removal of its existing plants, in addition to the settlement of new greenfield cement grinding units across the nation. So, the petitioner planned to expand its Dadri Plant located in Uttar Pradesh. To do this, the company signed an Engineering, Procurement and Construction (EPC) contract with another company named M/s Howe Engineering Projects India Private Limited (HEPIPL).
Invoices were raised in November 2022, and the first instalment paid by Ambuja Cement to HEPIPL included the applicable GST at the rate of 18 %. Later, due to some internal and external issues, the petitioner decided to incur some major changes in the project scope and timeline. HEPIPL claimed that it was not able to complete the work listed in the contract under the new conditions, so both sides manually agreed to cancel the contract in March 2023.
Refund Application
Since the contract was already cancelled in the middle with agreement from both sides, and the petitioner had already paid GST for the complete contract, however, the contract was not completed. So, the petitioner applied for a GST refund under Section 54 of the CGST Act.
However, the GST officer did not approve its GST refund claim and issued a show cause notice rejecting the claim, and thereafter issued the impugned order dated 4.8.2023, finally rejecting the claim application of the petitioner.
Aggrieved petitioner then filed an appeal challenging the impugned order; however, its appeal was dismissed by the Appellate Authority (respondent no. 4) in August 2024.
Ambuja Cement’s side:
- The refund was denied on unnecessary technical grounds not supported by the GST law. Since the contract was cancelled, the GST paid should be refunded.
Government’s side (AAG’s argument):
- The refund can only be claimed by the person who actually deposited the GST with the government (i.e., HEPIPL), not by Ambuja Cement. So, Ambuja wasn’t eligible to apply for the refund. However, the AAG also suggested that the matter could be reconsidered.
Court’s Findings and Decision
When the petitioner took its case to the Allahabad High Court, the court noted that the petitioner had paid GST to HEPIPL, and that amount was deposited in the government treasury. Section 54 of the GST Act allows any person who has paid tax to apply for a refund; it does not say only the person who deposited it can apply. Therefore, Ambuja Cement could also claim a refund if it proved that it paid the tax.
In its final decision, the High Court discovered that the appellate authority did not properly consider the facts. Thus, quash the appellate order dated August 31, 2024, and remand the case to the appellate authority for reconsideration of the case. The Appellate Authority has been asked to re-examine the refund claim, give Ambuja Cement a fair hearing, and pass a fresh order within two months.
The Court also clarified that its own observations should not influence the authority’s independent decision.
Citation: M/s Ambuja Cement Limited Vs Union of India and 4 others (Allahabad High Court); WRIT TAX No. 1837 of 2025; 06/11/2025
