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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
Bhargav D. Karia, D.N.Ray, JJ.
Messrs Aalidhra Texcraft Engineers & Anr. – Petitioners
Versus
Union Of India & Ors. – Respondents
R/Special Civil Application No. 14554 of 2024
Decided On : 12-12-2024
(A) Constitution of India - Article 227 - Central Goods and Services Tax Act, 2017 - Section 54(1) - Refund of tax - Petitioner challenged the rejection of refund claim on the ground of limitation - Amount of Rs.40,00,000/- deposited voluntarily by mistake - Court held that such payment is not subject to limitation under Section 54(1) - Impugned order rejecting refund quashed. (Paras 16, 36)
(B) Limitation - Refund claim - The court ruled that voluntary payments made by mistake do not fall under the limitation period prescribed for tax payments, thus allowing the refund claim irrespective of the time elapsed since payment. (Paras 16, 36)
JUDGMENT :
BHARGAV D. KARIA, J.
1. Heard learned advocate Mr. Paresh M. Dave for the petitioners and learned advocate Ms. Nidhi T. Vyas for the respondents.
2. RULE returnable forthwith. Learned advocate Ms. Nidhi Vyas waives the service of rule on behalf of the respondents.
3. By this petition under Article 227 of the Constitution of India, the petitioner has challenged the order in revision passed by the respondent No.2 dated 14.6.2024 rejecting the refund claim of the petitioner on the ground of limitation.
4. Brief facts of the case are as under:-
5. The petitioner for manufacturing the goods, various types of textile machinery and equipment was procuring various inputs, raw materials, capital goods including the supplies by way of import during the period from May 2019 to March 2020. The petitioner imported various inputs and material by filing 33 Bills of Entry which were cleared from the ports of imports to the factory premises of the petitioners on payment of import duties leviable including the integrated tax of Rs. 2,48,28,300/- which is admissible as Input Tax Credit (ITC). Accordingly, the petitioner availed the ITC of the said amount on the basis of the Bills of Entry and challans. However, it appears that due to some wrong impression created on the petitioner’s part that an excess credit of Rs.40,00,000/- was availed regarding the tax paid on imported goods, which the petitioner paid on account of the mismatch between the figures of ITC relatable to integrated tax paid on imports, which was auto populated in Form of GSTR-2A and monthly returns filed in Form GSTR-3B returns. On account of some mismatch of some error in system resulted in impression that excess credit of Rs.40,00,000/- was reflected in GSTR-2A return. The petitioner therefore deposited Rs.40,00,000/- on 13.11.2020 in Form DRC-03 believing bonafide that credit of Rs.40,00,000/- was erroneously availed in excess of what was legally admissible.
6. It is the case of the petitioner that no communication or letter was issued by the respondent authorities acknowledging the deposit of Rs.40,00,000/- as voluntary payment and such payment is still shown on GST portal as “pending for action by Tax Officer”.
7. It appears that in the month of January– February, 2024, the Range Superintendent of the respondent authorities conducted verification and formal auditing of the records of the petitioner. During the scrutiny, it was found that there is discrepancy about Rs. 40,00,000/- which was deposited vide Form DRC-03 but there was apparently no such tax liability which was required to be discharged within the financial year 2019-2020. Therefore, a notice in form of GST ASMT-10 dated 23.2.2024 was uploaded on the portal calling upon the petitioner to clarify about the payment of Rs.40,00,000/- through DRC- 03 along with other issues. The petitioner provided a clarification on 20.3.2024 stating that there was a excess payment of Rs.40,00,000/- by DRC-03 by mistake and filed an application for refund in Form GST RFD-01 on 30.3.2024 stating that the petitioner has paid excess GST by mistake. The respondent authority also accepted the reply of the petitioner and closed the matter by passing an order in Form GST ASMT-12 dated 24.4.2024.
8. The respondent No.2 issued a notice for rejection of the refund claim on 29.5.2024 calling upon the petitioner as to why the refund claim should not be rejected on the ground of limitation as the same was filed after two years from the date of payment as per the provisions of Section 54(1) of the GST Act.
9. It is the case of the petitioner that petitioner did not file any reply in writing. However, the representative of the petitioner had personal meeting with the jur
Voluntary payments made under a mistake are not subject to the limitation period for refund claims under Section 54(1) of the GST Act.
Refund claims for amounts paid under mistaken law must be honored, particularly when tax liability is later recognized as non-existent, overriding strict procedural limitations.
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....
Since the provisions of section 11B of the Act are not applicable to the claim of refund made by the petitioner, the limitation prescribed under the said provision would also not be applicable and th....
Appellant entitled to interest on delayed refund as per Sections 11B and 11BB of the Central Excise Act, which specifically governs the timing and rate of interest applicable.
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