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IN THE HIGH COURT OF DELHI AT NEW DELHI
Vibhu Bakhru, Amit Mahajan, JJ.
Mahalaxmi Exports Through Its Propetor Mr Sushil Kohli - Appellant
Versus
Commissioner of Delhi Goods And Services Tax & Ors. - Respondents
W.P.(C) 12697 of 2023
Decided On : 26-09-2023
Refund - Input Tax Credit - The court allowed the refund of unutilised Input Tax Credit in respect of zero-rated supplies, setting aside the impugned orders and directing the respondents to process the petitioner's refund application with applicable interest.
Fact of the Case:
The petitioner sought refund of unutilised Input Tax Credit (ITC) for the period from 1st April, 2019 to 30th September, 2019. The application was rejected on the ground of being barred by limitation due to not being filed within the stipulated period of two years from the relevant date.
Finding of the Court:
The court found that the petitioner's application for refund was within the time limit as prescribed under Section 54(1) of the CGST Act, if the period from 1st March, 2020 to 28th February, 2022, as excluded by a notification, was considered. The court set aside the impugned orders and directed the respondents to process the petitioner's refund application along with applicable interest.
Issues: The main issue was the denial of refund of unutilised Input Tax Credit (ITC) in respect of zero-rated supplies due to the application being considered as barred by limitation.
Ratio Decidendi: The court relied on the notification dated 05.07.2022, issued by the Central Board of Indirect Taxes and Customs, which provided for the exclusion of the period from 1st March, 2020 to 28th February, 2022, for the purposes of filing the refund application under Section 54 of the CGST Act. The court held that the petitioner's application was within the time limit if the said period was excluded.
Final Decision: The impugned orders were set aside, and the petition was allowed. The respondents were directed to process the petitioner's refund application along with the applicable interest within a period of two weeks from the date of the judgment.
JUDGMENT
Vibhu Bakhru, J.
CM APPL. 50155/2023 (for exemption)
1. Exemptions allowed, subject to all just exceptions.
2. The application stands disposed of.
W.P.(C) 12697/2023
3. Issue notice.
4. The learned counsel for the respondents accept notice.
5. The petitioner has filed the present petition impugning orders dated 28.01.2022 and 11.08.2023.
6. The petitioner is essentially aggrieved by the denial of refund of its unutilised Input Tax Credit (hereafter `ITC') in respect of zero-rated supplies.
7. The petitioner had filed an application on 28.11.2021, seeking refund of the unutilised ITC of a sum of Rs.6,57,568/- (Rs.3,28,784/- under the Central Goods and Services Tax Act, 2017 and Rs.3,28,784/- under the State Goods and Services Tax Act, 2017), for the period, from 1st April, 2019 to 30th September, 2019.
8. The petitioner's application was acknowledged by the concerned authorities on 30.12.2021 by issuing requisite form (GST-RFD-02). Thereafter, on the same date, the concerned authorities issued a Show Cause Notice (hereafter `SCN') in Form GST-RFD-08, proposing to reject the petitioner's application as being barred by time.
9. According to the concerned authorities, the petitioner's application was not filed within the stipulated period of two years from the relevant date as required under Section 54(1) of the Central Goods and Services Tax Act, 2017 (hereafter `CGST Act').
10. The petitioner responded to the said SCN on 13.01.2022. The petitioner contended that the delay was for bona fide and genuine reasons as the pandemic was raging since March, 2020 and the petitioner could not file his application for refund, due to the disruption caused as a result of the outbreak of COVID-19.
11. However, the petitioner's refund application was rejected by the impugned order dated 28.01.2022.
12. The petitioner preferred an appeal against the impugned order dated 28.01.2022 passed by the adjudicating authority. However, the appellate authority also dismissed the petitioner's appeal by an order dated 11.08.2023, on the ground that it was barred by limitation.
13. It is the petitioner's case that it was entitled to the refund in view of the orders passed by the Hon'ble Supreme Court in Suo Motu Writ Petition (Civil) No. 3 of 2020 in Re: Cognizance for Extension of Limitation, as well as the notification dated 05.07.2022, issued by the Central Board of Indirect Taxes and Customs (`CBIC').
14. The notification no. 13/2022-Central Tax dated 05.07.2022 expressly provides that the period commencing from the 1st day of March, 2020 to 28th February, 2022, would be excluded, inter alia, for the purposes of filing the refund application under Section 54 or Section 55 of the CGST Act.
15. Undisputedly, the petitioner's application for refund was within the time limit as prescribed under Section 54(1) of the CGST Act, if the said period is excluded.
16. The benefit of the said circular has not been provided to the petitioner, as the same was issued after the petitioner's refund application was rejected.
17. In view of the above, the impugned orders are set aside.
18. The petition is, accordingly, allowed.
19. The respondents are directed to process the petitioner's refund application along with the applicable interest within a period of two weeks from today.
The central legal point established in the judgment is that the exclusion of a specific period for filing refund applications under the CGST Act can impact the determination of whether an application....
The exclusion period provided in the notification issued by the Central Board of Indirect Taxes and Customs allowed for the period affected by the COVID-19 pandemic to be excluded for the purposes of....
The court emphasized the need for considering the petitioner's claim for condonation of delay and directed the matter to be reconsidered in light of the notification excluding the period for calculat....
The main legal point established in the judgment is that the date of filing the application on the common portal should be considered as the date of filing the claim for refund, rejecting the content....
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.
The court established that the limitation period for refund applications under the CGST Act is determined by the original filing date, not subsequent deficiencies.
A taxpayer is not required to make repeated applications for seeking a refund after succeeding in appellate proceedings, and the refund claim is required to be processed in accordance with the law.
The court ruled that the denial of a tax refund on grounds of limitation was wrong, emphasizing the principle of unjust enrichment, and clarified that the time limit of two years for refund applicati....
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