2022 (10) TMI 1000 - HC - GST

Seeking direction to re-credit amount in electronic credit ledger - period of limitation for refund - Gap between online application and physical application - time limitation in terms of Explanation (2) (c) (1) of Section 54 of the Central Goods Services Tax Act, 2017 HELD THAT - Sub-section (1) of Section 54 of the CGST ACt provides that 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. Prior to the insertion of Explanation (2) (ba) by the Finance Act, 2022, the relevant date in the case of goods exported out of India by land, the date on which such goods pass the frontier. In the case of services exported out of India, the date of receipt of payment in convertible foreign exchange or in Indian rupees or issue of invoices, where payment of the services had been received in advance prior to the date of issue of the invoice, is treated as relevant date. The total case of the respondents is thus that since the physical submission of the application along with documents was on 17.10.2019, it was beyond the period of two years and therefore time barred, counted from the relevant date. It is not in dispute that the petitioners filed their refund application in the common portal on 28.12.2018 and ARN was generated. Until the application with documents were physically submitted on 17.10.2019, the respondents did not do anything on the application, which was filed as per the mechanism adopted by the respondents, on 28.12.2018. It is not in dispute that the refund claim of the petitioner otherwise satisfied all requirements of Section 54 of the CGST Act and the attendant Rules and the petitioner was eligible to seek refund. The refund claim was however considered as time barred stating that the application was liable to be treated to have been filed on 17.10.2019 and not on 28.12.2018. It has to be held that the date of filing of the application by the petitioner on common portal would be liable to be treated as date of filing claim for refund to the satisfaction of requirement of Section 54 of the CGST Act and Rule 89 of the CGST Rules. The procedure evolved in Circular dated 15.11.2017 cannot operate as delimiting condition on the applicability of statutory provisions - the respondents are directed to re-credit the amount of Rs.3,37,076/- in the electronic credit ledger of the petitioner with interest at the rate of 9% p.a. from the date of order of rejection of the claim, i.e., 19.11.2019 till realisation - petition allowed.

Summary

Issues Involved:
1. Re-credit of the amount in the electronic credit ledger.
2. Validity of the order dated 19.11.2019 rejecting the refund claim.
3. Applicability of the two-year limitation period under Section 54 of the CGST Act.
4. Compliance with procedural requirements for refund claims.
5. Impact of Circular dated 15.11.2017 on refund claims.

Issue-wise Detailed Analysis:

1. Re-credit of the amount in the electronic credit ledger:
The petitioner sought a direction for the respondents to re-credit Rs. 3,37,076/- in their electronic credit ledger with interest from the date of the order dated 19.11.2019 till realization. The court directed the respondents to re-credit the said amount with interest at the rate of 9% p.a. from the date of the rejection order until realization.

2. Validity of the order dated 19.11.2019 rejecting the refund claim:
The petitioner challenged the order dated 19.11.2019 by the Assistant Commissioner, CGST & Central Excise, which rejected the refund claim on the grounds of being time-barred. The court found that the rejection of the refund claim was incorrect as the petitioner had filed the application on the common portal within the stipulated time.

3. Applicability of the two-year limitation period under Section 54 of the CGST Act:
The primary issue was whether the two-year period for filing a refund claim under Section 54 of the CGST Act should be counted from the date of filing the application on the common portal or the date of physical submission of the application with documents. The court held that the date of filing the application on the common portal should be considered for determining the limitation period.

4. Compliance with procedural requirements for refund claims:
The respondents argued that the refund claim was time-barred as the physical submission of the application and documents occurred after the expiry of the due date. However, the court noted that the petitioner had filed the application on the common portal within the time limit, and the delay in physical submission should not affect the validity of the claim.

5. Impact of Circular dated 15.11.2017 on refund claims:
The respondents relied on the Circular dated 15.11.2017, which required physical submission of the application and documents within the stipulated time. The court held that a circular cannot override statutory provisions to the detriment of the assessee. The date of filing the application on the common portal should be treated as the date of filing the refund claim.

Conclusion:
The court concluded that the petitioner's application on the common portal within the stipulated time satisfied the requirements of Section 54 of the CGST Act. The Circular dated 15.11.2017 could not impose additional conditions that conflict with statutory provisions. Consequently, the petition was allowed, and the respondents were directed to re-credit the amount with interest within two weeks from the date of receipt of the order.