2022 (9) TMI 604 - HC - GST

Refund of tax paid - export of services - barred by time limitation or not - relevant date - Section 54 of the Central Goods and Services Tax Act, 2017 CGST and Andhra Pradesh State Goods and Services Tax Act, 2017 - Applicability of Circular dated 20.07.2021 - HELD THAT - A perusal of the material on record would show that the refund application came to be made by the petitioner was on 22.09.2021, for the Tax period May, 2018 to May, 2019. Though, learned Government Pleader would contend that the said application came to be made beyond the period of two years, but the learned counsel for the petitioner would submit that, a reading of the Clause 2 to the Explanation to Section 54 of the CGST Act, show the relevant date is prescribed only for goods exported out of India, but, there is no provision determining the relevant date in respect of the supplies to SEZ units, which are considered as zero-rated sales under Section 16 of the Integrated Goods and Services Tax Act, 2017. It would be relevant to note that the recent Notification issued by Government of India, Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes and Customs, dated 05.07.2022 clearly postulates that the period from 1st March, 2020 to 28th February, 2022, for computation of period of limitation for filing refund application under Section 54 or Section 55 of the said Act shall stand excluded. It cannot be said that the application for refund was made beyond the period of limitation. Hence, the order under challenge is set aside and the matter is remanded back to the first respondent, for fresh consideration in accordance with law - petition disposed off.

Summary

Issues:
Challenge to Circular No.157/13/2021-GST dated 20.07.2021
Rejection of refund application as time-barred

Analysis:
The petitioner sought relief to set aside Circular No.157/13/2021-GST and the order rejecting the refund application as time-barred. The petitioner, engaged in coal trading, filed a refund application for tax paid from May 2018 to May 2019 on 22.09.2021. However, a show cause notice was issued on 12.10.2021 proposing rejection due to being time-barred under Section 54(14) of the CGST Act and Circular dated 20.07.2021. The first respondent rejected the application on 16.06.2022, leading to the writ petition.

The petitioner argued that a subsequent Notification dated 05.07.2022 rendered the rejection of the refund application unlawful. On the other hand, the Government Pleader for Commercial Tax defended the order based on the Circular dated 20.07.2021, emphasizing Clauses 3(iii) and 4(b) to justify the rejection.

The petitioner's counsel contended that the relevant date for the refund application was not clearly defined for supplies to SEZ units under zero-rated sales, unlike for goods exported out of India. Notably, a recent Notification dated 05.07.2022 excluded the period from 1st March, 2020 to 28th February, 2022, for computing the limitation period for filing refund applications under Section 54 or Section 55 of the Act.

Consequently, the Court found that the refund application was not time-barred as argued. The challenged order was set aside, and the matter was remanded to the first respondent for fresh consideration in compliance with the law. The writ petition was disposed of without costs, and any pending miscellaneous petitions were closed.