The filing of an application for refund in the prescribed form and manner stops the running of the limitation period, even if further documents or clarifications are sought by the proper officer.

JUDGMENT

Vibhu Bakhru, J.

1. The National Internet Exchange of India (hereafter `the petitioner') has filed the present writ petition impugning an order dated 13.04.2021 (hereafter `the impugned order'), passed by respondent no.3 (Assistant Commissioner, Department of Trade and Taxes) whereby the petitioner's claim for refund of Integrated Goods and Services Tax (hereafter `IGST') in respect of zero rated supplies, was rejected on the ground that the petitioner's application was filed beyond the period stipulated under Section 54(1) of the Central Goods and Services Tax Act, 2017 (hereafter `the CGST Act'). The petitioner assails rejection of its claim on the ground that its first application seeking refund was filed within the prescribed period. Its subsequent applications were filed online to clarify the deficiencies and queries raised by the concerned officer; therefore, it cannot be considered as a fresh application for the purposes of determining whether the claim was filed within the period of limitation.

2. In terms of Paragraph 10 of Circular No. 125/44/2019-GST dated 18.11.2019 (hereafter `the impugned Circular') once a deficiency memo is issued, the application for refund would not be processed and the taxpayer is required to file a fresh application. Further in terms of paragraph 12 of the impugned Circular, the fresh application is also required to be filed within the stipulated period of two years from the relevant date. Thus, notwithstanding that the taxpayer's first application was within the period of limitation, in terms of the impugned Circular, the taxpayer's claim for refund is liable to be rejected as barred by limitation, if the fresh application, pursuant to a deficiency memo, is filed after the period of limitation as specified under Section 54 of the CGST Act.

3. The petitioner assails the impugned Circular as well as Rule 90(3) of the Central Goods and Services Tax Rules, 2017 (hereafter `the CGST Rules') as unconstitutional and ultra vires the CGST Act.

Factual Context

4. The petitioner is a non-profit company registered in the State of Delhi for the purposes of Goods and Services Tax and has been assigned, GSTIN 07AABCN9308A1ZT. The petitioner is, inter alia, engaged in the export of internet services, peering of internet service providers and routing of domestic internet traffic in India. The petitioner additionally manages the .IN registry which offers the .IN domain name.

5. On 17.10.2019, the petitioner filed a claim for refund of Rs.51,28,263/- being the IGST paid on zero rated supplies for the month of October 2017. The said claim for refund was made in terms of Section 54 of the CGST Act read with Rule 89 of the CGST Rules.

6. In terms of Section 16(3)(b) of the Integrated Goods and Services Act, 2017 (hereafter `IGST Act') as in force prior to the enactment of the Finance Act 2021, the petitioner was eligible to claim refund of the tax paid on the export of its services. In terms of Section 54 of the CGST Act, the petitioner was required to file its refund application within two years from the date of the invoice, which in the present case is 31.10.2017.

7. The petitioner was issued a deficiency memo (No. ZA071019001884M) dated 21.10.2019 (hereafter `deficiency memo no.1') by respondent no.4 (Sales Tax Officer Class II/AVATO) in respect of its refund claim, pointing out certain defects. The petitioner was advised to file a fresh refund application after the rectification of the said defects.

8. Thereafter, the petitioner re-filed the refund application as a fresh refund application on 31.10.2019. The petitioner subsequently received another deficiency memo (No. ZA071119001459L) dated 11.11.2019 (hereafter `deficiency memo no.2') issued by respondent no.3 pointing out certain mismatch in documents and seeking further information regarding the petitioner's claim for refund. The petitioner was once again advised to file a fresh refund application after the rectification of defects.

9.