Telangana High Court Orders Reconsideration of Aurobindo Pharma’s Rejected GST Refund Claims

Background and Context

Aurobindo Pharma Limited approached the Telangana High Court through a series of writ petitions, contesting the rejection of its refund claims under GST related to zero-rated supplies for multiple tax periods. Both the adjudicating authority (Order-In-Original) and the first appellate authority had earlier ruled against granting these refunds.

The present batch of cases concerns refund of tax paid in connection with zero-rated supplies, and the assessee’s grievance is that accumulated unutilized cess linked to such supplies was wrongly denied as refundable.

The High Court examined:

  • Whether the rejection of refund of accumulated unutilized cess relating to zero-rated supplies was legally sustainable; and
  • Whether the matter required reconsideration in light of binding precedents, particularly decisions of the Gujarat High Court and an earlier Division Bench ruling of the same High Court involving the same assessee.

Details of the Writ Petitions

Aurobindo Pharma Limited had filed individual writ petitions covering several tax periods and refund amounts. The petitions challenged the rejection of refund of tax paid on zero-rated supplies. The Court recorded that the assessee had preferred separate writ petitions for each tax period, setting out for each:

  • The relevant tax period;
  • The refund amount claimed;
  • The date of the Order-In-Original; and
  • The date of the Order-In-Appeal.

Illustratively, the table before the Court included, among others, entries of the following nature (as part of a larger batch):

  • Writ petitions for tax periods such as June 2020, July 2020, August 2020, September 2020, November 2020, December 2020, January 2021, March 2021, April 2021, May 2021, June 2021, July 2021, August 2021, September 2021, October 2021, December 2021, January 2022, September 2022, October 2022, November 2022, December 2022, March 2023, April 2023, May 2023, July 2023;
  • Refund amounts running into several lakhs of rupees for each period;
  • Order-In-Original dates and corresponding Order-In-Appeal dates;
  • All Orders-In-Appeal being dated 29/11/25, reflecting a consistent appellate rejection across the batch.

These petitions formed part of a consolidated challenge where the core question in law and facts was identical across periods.

Earlier Division Bench Ruling in Aurobindo Pharma’s Case

The High Court noted that a Division Bench, presided over by the Hon’ble The Chief Justice, had previously decided an earlier set of writ petitions filed by the same assessee, i.e., Aurobindo Pharma Limited v. State of Telangana, 2025 181 taxmann.com 704 (Telangana). In that earlier matter, the Court had squarely dealt with the same legal issue involving refund of unutilized compensation cess in the context of zero-rated supplies.

In that decision, the Division Bench took note of the legal position clarified by:

  • Atul Limited and another v. Union of India and others, 2025 (7) TMI 1768; and
  • Patson Papers Private Limited v. Union of India and others, 2025 (6) TMI 1343.

Position of the State in the Earlier Case

In the earlier Aurobindo Pharma batch, counsel for the State had, on instructions, made the following submissions before the Division Bench:

  1. The law on refund of unutilized ITC and compensation cess linked to zero-rated supplies had been clearly explained by the Gujarat High Court in Atul Limited and another v. Union of India and others, 2025 (7) TMI 1768.