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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
BHARGAV D. KARIA, NIRAL R. MEHTA, JJ.
M/s Darshan Processors – Appellant
Versus
Union Of India & Ors. – Respondents
R/SPECIAL CIVIL APPLICATION NO. 2114 of 2021 With R/SPECIAL CIVIL APPLICATION NO. 4111 of 2021 With R/SPECIAL CIVIL APPLICATION NO. 2115 of 2021 With R/SPECIAL CIVIL APPLICATION NO. 2116 of 2021 With R/SPECIAL CIVIL APPLICATION NO. 2117 of 2021
Decided on : 26-07-2024
Refund - GST Refund Application - CGST Act - Sections 54(1), 54(3)(ii), 54 Explanation(2)(e) - The court interpreted the provisions regarding the filing of refund applications, emphasizing that the original application date is crucial for determining the limitation period, and clarified that deficiencies do not invalidate timely applications.
Fact of the Case:
The petitioner, a partnership firm engaged in textile dyeing, sought a refund of accumulated Input Tax Credit due to an inverted duty structure, claiming the refund application was timely filed despite subsequent deficiencies noted by the authorities.
Finding of the Court:
The court found that the original refund application was filed within the two-year limit and that subsequent applications were continuations of the original, thus should be considered valid despite deficiencies raised by the authorities.
Issues: Whether the refund application was time-barred under the provisions of the CGST Act, considering the original filing date and subsequent deficiency notices.
Ratio Decidendi: The court held that the original refund application date is critical for limitation purposes, and deficiencies do not negate the validity of a timely application, allowing the petitioner to proceed with the refund claim.
Result: The impugned order rejecting the refund application was quashed, and the application was restored for fresh consideration on merits.
JUDGMENT :
(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA)
1. Heard learned advocate Mr. Hiren J. Trivedi for the petitioner, learned advocate Mr.Hirak Shah for learned advocate Mr. Nikunt Raval for respondent no.2 and learned Assistant Government Pleader Mr. Raj Tanna for the respondent State.
2. Since issue involved in all these petitions is identical, they have been heard together would be disposed of by this common judgment.
3. Rule returnable forthwith. Learned advocate Mr.Hirak Shah for learned advocate Mr. Nikunt Raval waives service of notice of rule on behalf of respondent no.2 and learned Assistant Government Pleader Mr. Raj Tanna waives service of notice of rule on behalf of the respondent State.
4. For the sake of convenience, facts are noted from Special Civil Application No.2114 of 2021.
5. By this petition under Articles 226 and 227 of the Constitution of India, the petitioner has prayed for the following reliefs:
(B) YOUR LORDSHIPS may be pleased to issue a writ of mandamus or writ in the nature of mandamus or any other writ, orders or directions to the respondent authorities to immediately sanction the refund of Rs. 1,43,780/- filed vide application dated 17.09.2018 in form GST RFD- 01A filed bearing ARN no. AC2407170192753;
(C) YOUR LORDSHIPS may be pleased to direct the respondent authorities to pay interest @ 9% to the petitioner herein on the amount of refund from the date of filing the refund application till the date on which the amount of refund is paid to the petitioner herein, as the same is arbitrarily and illegally withheld by the respondent authorities;
(D) Your Lordships may be pleased to grant an ex-parte, ad interim order in favour of the petitioner herein in terms of prayer clause 'A' and 'B' herein above;
(E) Such further relief(s) as deemed fit in the facts and circumstances of the case may kindly be granted in the interest of justice for which act of kindness your Petitioners shall forever pray.”
6. Brief facts of the case are that petitioner is a partnership firm which is engaged in textile dyeing and printing and is holding GST Registration no.24AADFK2670H1ZJ.
7. It is the case of the petitioner that the petitioner is eligible to claim refund of accumulated Input Tax Credit due to inverted duty tax structure from July 2017 as per section 54(3)(ii) of the Central Goods And Service Tax Act, 2017 (For short “CGST Act”).
8. It is the case of the petitioner that due to non availability of refund module on the common portal, vide Circular No. 24/24/2017-GST dated 21.12.2017, it was decided to permit the applications of refund claims manually in Form GST RFD-01 A on account of inverted duty structure and the said circular also clarified that Circular No.17/17/2017-GST dated 15.11.2017 shall also be applicable for processing refund application filed under inverted duty structure.
9. The petitioner therefore, filed GSTR-1 for July 2017 on 26.08.2017 and refund application for July-2017 on 17.09.2018 in Form GST RFD-01A which was accepted and the acknowledgment bearing ARN AC2407170192753 was generated. The petitioner thereafter filed GSTR-3B on 23.11.2017.
10. After filing the refund application online, the petitioner filed the refund application manually before the respondent no.3 Assistant Commissioner of State GST on 26.12.2018.
11. It is the case of the petitioner that in November, 2019 the petitioner came to know that the petitioner was supposed to file the refund before respondent no.2 - Assistant Commissioner of Central GST & Excise Division-II. Accordingly, petitioner vide letter dated 26.11.2019 requested respondent no.3 to transfer the files pertaining to 2017-2018 to respondent no.2 and said files were transferred to offic
The court established that the limitation period for refund applications under the CGST Act is determined by the original filing date, not subsequent deficiencies.
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....
The court held that a refund application filed within the statutory period cannot be rejected on grounds of limitation, and the applicant must be afforded an opportunity to be heard before any reject....
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.
Voluntary payments made under a mistake are not subject to the limitation period for refund claims under Section 54(1) of the GST Act.
The main legal point established in the judgment is the principle of unjust enrichment and the applicability of Section 54 of the CGST Act in claiming refunds under the GST regime.
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