Gujarat High Court: Cotton Seed Oil Cake Qualifies as Exempt Cattle Feed Under GST — Refund Cannot Be Denied

Overview of the Ruling

The Hon'ble Gujarat High Court, in the matter of N H Associates vs Superintendent of Central GST and Central Excise, delivered a significant ruling affirming that GST paid on the supply of cotton seed oil cake is refundable, since the product falls squarely within the exempted category of cattle feed under Serial No. 102 of Notification No. 02/2017-Central Tax (Rate). The Court firmly rejected the Revenue's position and directed the authorities to process the refund within a stipulated timeframe, reinforcing a consistent and principled approach to GST exemption interpretation.

Background and Factual Matrix

Who is the Assessee?

M/s N H Associates (hereinafter referred to as "the Assessee") is a business entity engaged in the supply of cotton seed oil cake. The dispute in this case arose out of GST demands raised by the department for supplies made during the period July 1, 2017 to September 21, 2017.

What Led to the Payment of GST?

Pursuant to audit objections and consequent demand proceedings initiated by the department, the Assessee deposited CGST, SGST, and IGST through DRC-03 dated November 15, 2022. This payment was appropriated by the authorities against the demand raised for the alleged non-payment of GST on the outward supply of cotton seed oil cake during the aforementioned period.

How Did the Dispute Escalate?

Following the payment, the Assessee sought a refund on the ground that cotton seed oil cake, being predominantly used as cattle feed, is exempt from GST. However, the authorities took a contrary view and proceeded to confirm the demand through a series of adverse orders:

  • Order-in-Original dated December 15, 2023 — issued by the Superintendent of Central GST and Central Excise
  • Order-in-Appeal dated July 5, 2024 — affirming the original order
  • DRC-07 dated December 26, 2024 — confirming the outstanding demand

Aggrieved by these orders and the continued denial of the refund, the Assessee approached the Gujarat High Court by way of R/Special Civil Application No. 4566 of 2025, seeking quashing of the impugned orders and a direction to the Respondents to process the refund.

The central question of law before the Hon'ble Gujarat High Court was:

Whether GST is leviable on the supply of cotton seed oil cake, and whether the refund of GST already paid can be denied on the ground that the supply was made to traders rather than directly to end users, when the product itself is exempt as cattle feed under Notification No. 02/2017-CT (Rate) dated June 20, 2017?

Contentions of the Parties

Assessee's Stand

The Assessee contended that: