Refund claim based on accumulated input tax credit must be tested under the statute, not a conflicting circular.

An appellate refund order rejecting accumulated input tax credit solely on Circular No. 135/15/2020-GST could not stand because the circular could not override Section 54(3)(ii) of the CGST Act. The appellate authority had not independently examined the refund claim under the governing statutory provision, and the additional reasoning was insufficient to cure that defect. The order was therefore set aside and the matter remitted for fresh decision in accordance with law, leaving the refund claim open for reconsideration on merits.

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Issues: Whether the appellate order rejecting refund of accumulated input tax credit on the sole basis of Circular No. 135/15/2020-GST could be sustained, and whether the matter required reconsideration in light of the earlier decision holding the circular inconsistent with Section 54(3)(ii) of the Central Goods and Services Tax Act, 2017.

Analysis: The earlier binding decision had already held that the circular, being subordinate legislation, could not override Section 54(3)(ii) of the Central Goods and Services Tax Act, 2017. The appellate authority proceeded on the circular alone, without independently examining the refund claim on the applicable legal position. The additional reasoning was not treated as sufficient to sustain the appellate order.

Conclusion: The appellate order was set aside and the appeal was remitted to the appellate authority for fresh decision in accordance with law.

Final Conclusion: The petitioner succeeded in obtaining reversal of the impugned appellate order, but the refund dispute itself was left open for reconsideration on merits.

Ratio Decidendi: A refund order cannot be sustained where the appellate authority relies solely on a circular that is inconsistent with the parent statute, and the matter must be decided afresh under the governing statutory provision.

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