JUDGEMENT

(Per: HONOURABLE THE CHIEF JUSTICE) Date : 29-02-2024 The petitioner is before this Court claiming a refund of the tax paid by the petitioner on the ‘Inverted Duty Structure’ applicable to the business carried on by the petitioner; being bottling of LPG.

2. The petitioner purchases LPG in bulk after paying the applicable tax. The bulk LPG purchased is bottled in cylinders and sale is made to customers, collecting tax from commercial users; at the same rate of purchase of LPG and to the domestic users, at a lesser rate. As per Section 54(3)(ii) of the Central Goods and Services Tax Act, 2017 (for brevity ‘CGST Act’) read with Rule 89(5) of the Central Goods and Services Tax Rules, 2017 (for brevity ‘CGST Rules’) a refund of such differential tax is provided which is defined by the term ‘Inverted Duty Structure’.

3. Section 54 has the nominal heading of ‘Refund of tax’ under which the refund of higher tax paid on purchase, than that levied on subsequent sale; is provided by sub-section (1). It is also a mandate that such refund application shall be filed before the expiry of two years from the relevant date, in such form and manner as may be prescribed. The petitioner had paid tax in accordance with the statute and had filed all its returns in time.

4. The period in the present case relates to the Financial Year 2018-19, specifically to the period between October 2018 to March 2019. The petitioner filed an application for refund in the format RFD-01 on 12.04.2023 in terms of Rule 89(1) read with Section 54 of the GST Act much later to the limitation period and claimed a refund of Rs 6,12,487/- paid under IGST.

5. The 6th respondent who is the Assessing Officer of the petitioner issued Annexure-P/4 pointing out that the application is filed beyond the limitation period, to which the petitioner replied by Annexure-P/5. It was the contention of the petitioner, in the reply filed, that since the petitioner did not succumb to the Assessing Officer’s claim for bribe, he had wrongly raised demands, far in excess of that due for the years 2018-2019 and 2019-2020. The amounts so assessed and demanded were also set off from the credit ledger of the petitioner’s input credit. The copy of the demand orders and the recovery made are produced as Annexure-P/6 series. An appeal was filed in which the Appellate Authority by Annexure-P/7 series allowed the appeal and the recovered amounts were credited back to the credit ledger on 24.08.2022.

6. It is claimed by the petitioner that the order in appeal passed on 20.02.2022 was received after six months on 15.08.2022 and the limitation had to commence from the said date. It is also contended that the due date for filing of refund, for the Financial Year 2018-2019 has been extended till 31.03.2023 by the Central Board of Indirect Taxes and Customs vide its Notification No. 13/2020- Central Tax dated 05.07.2022.

7. The relevant date from which the limitation of two years commence, as noticed in Section 54, in so far as unutilized input tax credit under sub-section (3), is the end of the financial year in which such claim for refund arises; as per Explanation (2)(a). Hence, for the Assessment Year 2018-19, the relevant date would be 31.03.2019 and in that context the expiry of limitation for filing a refund application falls on 31.03.2021. In the present case, the application for refund was made by the petitioner on 12.04.2023. Even as per the notification of the Central Board of Indirect Taxes, the refund claim for the Financial Year 2018-19 stood extended only till 31.03.2023.

8. However, it has to be noticed that even without reckoning the allegation of demand of bribe, there was an assessment carried out for the Financial Years 2018-19 and 2019-20 against which a demand order was raised on 29.01.2021. Copy of the ledger produced along with Annexure-

P/6 series also shows a recov