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2025 Supreme(Jhk) 27
IN THE HIGH COURT OF JHARKHAND AT RANCHI
M.S. RAMACHANDRA RAO, CJ., DEEPAK ROSHAN, J.
M/s. BLA Infrastructure Private Limited - Appellant
Vs.
The State of Jharkhand - Respondent
W.P.(T) No. 6527 of 2024
Decided On : 30-01-2025
Advocate Appeared:
For the Appellant :Mr. Nitin Kumar Pasari, Advocate
For the Respondents: Mr. Mohan Kr. Dubey, A.C. to A.G
The time limit for refund applications under Section 54 of the GST Act is directory, allowing claims beyond two years if justified, in line with Article 265 of the Constitution.
Headnote:
(A) Goods and Services Tax Act, 2017 - Section 54 - Constitution of India - Article 265 - Refund of pre-deposit amount - Petitioner filed for refund after appeal was allowed but was denied on grounds of being time-barred - Court held that the time limit under Section 54 is directory, allowing for refund applications even beyond two years if justified - Respondents' rejection of refund application quashed - Respondents directed to process refund within six weeks along with interest. (Paras 9, 12, 26)
(B) Refund Application - Time Limitation - The court ruled that the rejection of a refund application as time-barred, based solely on a strict interpretation of the two-year limit, is not permissible when the statute allows for discretion. (Paras 12, 26)
Facts of the case:
The petitioner, a registered dealer under the GST Act, made a pre-deposit to maintain an appeal against an ex-parte order imposing liability. The appeal was allowed, but the refund application was later rejected as time-barred. (Paras 3-6)
Findings of Court:
The court determined that the rejection of the refund application was unlawful as the time limit for filing the application is not mandatory. It directed the respondents to process the refund within six weeks. (Paras 26)
Issues: Whether the application for refund made beyond the two-year period should be entertained or if it is time-barred. (Paras 8)
Ratio Decidendi: The court emphasized that the word 'may' in Section 54 indicates a directory provision, allowing for flexibility in the filing of refund applications beyond the stipulated time frame when justified. (Paras 12, 26)
Result: Writ application allowed; refund to be processed within six weeks.
JUDGMENT :
Deepak Roshan, J.
Heard learned counsel for the parties.
2. The instant writ application has been preferred by the petitioner praying therein for the following reliefs:
a. For issuance of an appropriate writ, order or direction, directing upon the Respondents to show cause as to why the refund application of the Petitioner has not been processed which pertains to refund of the pre- deposited amount with the government exchequer in order to maintain the appeal under Section 107 of the Act.
b. Consequent upon showing cause, if any, and on being satisfied that the Respondents were obligated to grant refund of the pre-deposit amount and the refund application of the Petitioner could not have been automatically rejected on the ground of being time barred, the Respondents be directed to refund the amount of pre-deposit forthwith along with statutory interest.
c. For issuance of an appropriate writ, order or direction, holding and declaring that once the appeal preferred by the assessee is allowed, withholding of the pre- deposit amount without any reasonable cause would be hit by Article 265 of the Constitution of India, which mandates that no tax shall be levied or collected except by authority of law.
d. For issuance of an appropriate writ, order or direction, quashing and setting aside the deficiency memos issued in Form GST RFD-03 dated 06.11.2024 (Annexure-5) being wholly illegal and arbitrary and consequently direction be issued to grant refund of Rs. 1,13,454/- illegally retained by the Respondents, along with applicable interest and costs;
e. For issuance of any other appropriate writ(s)/ order(s)/ direction(s) as Your Lordships may deem just and proper in the facts and circumstances of the case for imparting substantial justice to the Petitioner.
3. The brief facts of the case are that the petitioner is a registered dealer under the Goods & Services Tax Act and is carrying out business of loading, unloading of Coal and transportation of coal loaded into tipper. In the month of January 2021, alleging mismatch in GSTR-1 and GSTR-3B for the month of September 2019, Show Cause Notice under Section 74 of the JGST Act, 2017 was issued and ex- parte order was passed vide order dated 31.08.2021, imposing liability of Rs. 16,90,442/-, which inter alia included tax, interest and penalty.
4. Aggrieved thereof, the petitioner preferred an appeal within time making a statutory pre-deposit of the 10% of the disputed tax amount under Section 107(6)(b) of the Act, in order to maintain the appeal.
5. After hearing the petitioner and scrutinizing the documents, the appeal was allowed on 09.02.2022 and Form GST APL-04 dated 10.02.2022 was issued.
6. The petitioner made an application for refund of the pre-deposit amount on 11.09.2024, which by virtue of a Deficiency Memo dated 06.11.2024 was held to be beyond the period prescribed under section 54(1) of the Goods & Services Tax Act and hence, aggrieved thereof, the petitioner is before this Court.
7. Counter Affidavit has been filed by the respondents, defending the actions of the Department inter alia purportedly in terms of Section 54 and also referring to Circular No. 125/44/2019-GST dated 18.11.2019 issued by the Government of India, Ministry of Finance, GST Policy Wing, treating the application to be time barred and further submitting that the Jurisdictional Officer has no authority/discretion to condone the delay.
8. In the aforesaid background, we have to decide as to whether the application for refund made beyond a period of 2 years should be entertained or not or if it is time barred.
9. For better appreciation, Section 54 of the Act is hereto quoted for ease: Section 54. Refund of tax.-
(1) Any person claiming refund of any tax and interest, if any, paid on such tax or any other amount paid by him, may make an application before the expiry of two years from the relevant date in such form and manner as may be prescribed:
Provided that a registered person, claiming refund of any balance in
