Hooghly Motors Pvt. Ltd. Wins Case Against State of West Bengal on GST Input Tax Credit Eligibility
In a significant ruling, the Calcutta High Court has upheld the claim of Hooghly Motors Pvt. Ltd., an e-rickshaw manufacturer, for the refund of unutilized Input Tax Credit (ITC) under the Goods and Services Tax (GST) Act, 2017. The judgment was delivered by Justice Om Narayan Rai on December 22, 2025, effectively overturning previous orders by the adjudicating and appellate authorities that denied the company’s refund claim.
The case, cited as Hooghly Motors Pvt. Ltd. v. State of West Bengal, revolved around the eligibility of stereo systems, used in the manufacturing of e-rickshaws, as "inputs" under the GST Act. The petitioner had initially sought a refund of Rs. 8,94,583/- which was rejected by the adjudicating authority on October 11, 2023, and subsequently by the appellate authority on December 12, 2024.
Represented by Mr. Avra Mazumder, the petitioner argued that stereo systems installed in e-rickshaws should qualify as inputs as per Section 2(59) of the GST Act, 2017. This provision defines inputs as goods used in the course or furtherance of business. The petitioner emphasized that the stereo systems were integral to the business operations of manufacturing e-rickshaws, thus qualifying for an ITC refund under the inverted duty structure.
The court noted that a similar refund request by Hooghly Motors had been approved by another appellate authority in a prior case dated May 30, 2024, which set a precedent for the current proceedings. The state, represented by Mr. Nilotpal Chatterjee and Mr. Tanoy Chakraborty, acknowledged the earlier favorable ruling for the petitioner and provided instructions from the Additional CCT/Law, confirming the petitioner’s eligibility for a refund.
Justice Rai concluded that the definition of "input" should be interpreted broadly to encompass goods used in the course of business, not limited to manufacturing processes alone. The court directed the state to verify the records and process the refund within six weeks, setting aside the appellate order of December 12, 2024.
The decision underscores the expansive interpretation of business-related inputs under the GST framework, aligning with the definitions provided in Sections 2(59) and 2(17) of the GST Act, 2017. This ruling is expected to have significant implications for similar refund claims under the inverted duty structure, reinforcing the principles of equitable tax treatment for businesses.
Bottom Line:
Refund of unutilised Input Tax Credit (ITC) under GST Act, 2017 - Stereo system used in manufacturing of e-rickshaw qualifies as "input" - Refund eligible where credit accumulates due to inverted duty structure.
Statutory provision(s): Section 54(3) of GST Act, 2017, Section 2(59) of GST Act, 2017, Section 2(17) of GST Act, 2017
Hooghly Motors Pvt. Ltd. v. State of West Bengal, (Calcutta) : Law Finder Doc Id # 2829072
