C.A.V. ORDER

(PER HON’BLE Mr. JUSTICE K. V. ARAVIND)

Heard Sri Aravind V. Chavan, learned Senior Standing Counsel for the appellants-Revenue and Sri Bharath B. Raichandani, learned counsel for the respondent-Assessee.

2. The Revenue has preferred these intra-Court appeals under Section 4 of the Karnataka High Court Act, 1961, impugning the order dated 07.11.2025 passed by the learned Single Judge in W.P. No.27259/2024 (T-RES) and four other petitions.

All the appeals raise common questions. Learned counsel appearing on both sides addressed common submissions. Hence, the appeals are disposed by common judgment.

For convenience, the facts in Writ Appeal No.110/2026 are referred.

A. Facts in brief:

3. The respondent–assessee is a company engaged in the business of healthcare, life sciences, and electronics, providing intermediary services to foreign entities and earning commission income therefrom. The assessee filed its return in Form GSTR-3B for the tax period October 2017 and paid Integrated Goods and Services Tax (IGST). Subsequently, the assessee filed another return in Form GSTR-3B in March 2018 and paid Central Goods and Services Tax (CGST) and State Goods and Services Tax (SGST).

3.1 In the return filed earlier, the services were treated as “export of services”, and IGST was paid. However, in the return filed in March 2018, the assessee paid CGST and SGST, treating the transaction as intra-State supplies. It is stated that the erroneous payment of IGST was not refunded. Notification No.35/2021–Central Tax dated 24.09.2021 inserted Rule 89(1A) of the Central Goods and Services Tax Rules, 2017 (for short, “CGST Rules”), prescribing the procedure and timelines for claiming refund.

3.2 It is further stated that circulars were issued by the GST authorities to give effect to Rule 89(1A). The application filed by the assessee under Section 54 of the Central Goods and Services Tax Act, 2017 (for short, “CGST Act”) came to be rejected on the ground that it was filed beyond the prescribed period. It was held that although Rule 89(1A) came into effect from 24.09.2021, a period of two years was provided to claim refund in respect of cases that had arisen prior to the Rules coming into force. The application for refund filed by the assessee is dated 30.03.2024. Accordingly, by order dated 27.05.2024 at Annexure–B, the claim for refund was rejected. Aggrieved by the order rejecting the refund, the assessee preferred a writ petition.

3.3 In the impugned order, the learned Single Judge allowed the writ petition. The learned Single Judge, while setting aside the order rejecting the refund, held that Section 54 of the CGST Act and Rule 89(1A) of the CGST Rules are directory in nature and not mandatory. The learned Single Judge further held that the wrongful payment of IGST is not disputed by the authorities, and therefore, the rejection of the refund claim due to it being filed belatedly is incorrect. While holding so, the learned Single Judge declared that the refund application is not belated and directed the authorities to pass appropriate orders on the refund application within the prescribed time frame.

B. Submissions:

(i). On behalf of Revenue;

4. Sri Aravind V. Chavan, learned Senior Standing Counsel for the appellants–Revenue, submits that Section 54 enables a claim for refund of any tax. The provision prescribes a period of two years from the relevant date, within which such claim is required to be made in the prescribed form and manner. It is further submitted that the period of two years prescribed under Section 54 is mandatory. According to the learned counsel, declaring the time limit under Section 54 as directory, as held by the learned Single Judge, would amount to re-writing the statutory provision, which is impermissible in law.

4.1 The learned Senior Standing Counsel further submits that sub-rule (1A) of Rule 89 came into effect from 24.09.2021. Since the prescribed Form was not available till that date, the proviso to su