2023 (1) TMI 792 - HC - GST

Refund of IGST paid - zero rated supply - non-compliance of the provisions of Circular No. 125/44/2019 -GST dated 18.11.2019 - rejection of refund solely on the ground that the refund application has been filed after two years from the relevant date - Section 16(1) (d) of the Integrated Goods and Services Tax, 2017 - HELD THAT - Hon'ble Apex Court in IN RE COGNIZANCE FOR EXTENSION OF LIMITATION 2021 (3) TMI 497 - SC ORDER in respect of the limitation where it was held that in cases where the limitation would have expired during the period between 15.03.2020 till 14.03.2021 notwithstanding the actual balance period of limitation remaining all persons shall have limitation period of 90 days from 15.03.2021. In the event the actual balance period of limitation remaining, with effect from 15.03.2021, is greater than 90 days, that longer period shall apply. The order passed by the respondent no.3 cannot be allowed to stand and the matter deserves to be relegated to the respondent no.2 to decide the appeal on merits - petition allowed in part and part matter on remand.

Summary

Issues:
1. Refund rejection order dated 04.01.2021 and appellate order dated 24.08.2021 challenged under Article 227 of the Constitution of India.
2. Refund claim of unutilised ITC on zero rated supply of goods to SEZ Unit/Developer.
3. Rejection of refund application based on time-barred filing and non-compliance with Circular No. 125/44/2019 - GST.
4. Appeal under Section 107 of the Central Goods and Services Tax Act, 2017 rejected based on Circular No. 157/13/2021 - GST.
5. Application of limitation period for filing refund application.

Analysis:
1. The petitioner, engaged in the business of manufacturing Soyabean refined oil, supplied goods to an SEZ Unit and paid IGST. The refund application was initially filed on 12.10.2020 but was rejected due to deficiencies and subsequent non-compliance with Circular No. 125/44/2019 - GST. The rejection was based on filing after two years from the relevant date and missing documentation.
2. The rejection notice was issued under Rule 92(3) of the CGST Rules, 2017, and the petitioner's appeal was dismissed by the appellate authority based on Circular No. 157/13/2021 - GST. The petitioner argued that the limitation period should be extended as per the Suo-motu W.P.(Civil) No. 3/2020 judgment of the Apex Court, which was accepted by the respondent.
3. The respondent authorities admitted their mistake regarding the application of Circular No. 157/13/2021 - GST and acknowledged that the limitation period should not hinder the petitioner's case. The High Court partly allowed the petition, setting aside the appellate order and remanding the matter for a decision on merits within 30 days.
4. The Court clarified that it did not express any opinion on the case's merits and made no order as to costs. The judgment focused on procedural errors and the correct application of the limitation period for filing the refund application, emphasizing adherence to legal provisions and fairness in decision-making under GST laws.