2023 (2) TMI 819 - HC - GST

Refund of GST - Filing of fresh application in case of a deficiency - Constitutional Validity of Rule 90(3) of the Central Goods and Services Tax Rules, 2017, Para 12 of the Circular No. 125/44/2019-GST dated 18.11.2019 - vires of Section 54 of the Central Goods and Services Tax Act, 2017 - validity of Para 3(ii) of the Circular No. 157/13/2021-GST dated 20.07.2021 - vires of order issued under Article 142 of the Constitution by Hon ble Supreme Court in the matter of Re Cognizance for Extension of Limitation 2021 (5) TMI 564 - SC ORDER or not. HELD THAT - The prayers in the present petition are premised on the basis that the petitioner s application was, otherwise, beyond the stipulated period of two years. In view of the submission made by learned Counsel for the respondent, the petitioner s grievance against the Rule 90 and circular dated 18.11.2019 does not survive, therefore, we do not consider it apposite to examine the same in this petition. Since the petitioner s grievance in regard to the order dated 28.07.2021 stands addressed, no further orders are required to be passed in this petition - petition disposed off.

Summary

Issues:
Challenge to Rule 90(3) of the Central Goods and Services Tax Rules, 2017, Challenge to Circular No. 125/44/2019-GST, Challenge to Circular No. 157/13/2021-GST, Refund application under Section 54 of the Central Goods and Service Tax Act, 2017, Deficiency Memos issued, Rejection of refund application on the ground of limitation, Exclusion of time period for limitation calculation, Setting aside of order rejecting refund application, Remand for fresh consideration.

Challenge to Rule 90(3) of the Central Goods and Services Tax Rules, 2017:
The petitioner challenged Rule 90(3) of the Central Goods and Services Tax Rules, 2017, as being ultra vires Section 54 of the Central Goods and Services Tax Act, 2017. The petitioner argued that the rule required filing a fresh application in case of a deficiency, which was beyond the scope of the Act. However, the court did not delve into this issue further as the respondent conceded that the order rejecting the refund application on the ground of limitation was unsustainable. The court, therefore, did not find it necessary to examine the challenge to Rule 90 in this petition.

Challenge to Circular No. 125/44/2019-GST:
The petitioner also challenged Para 12 of Circular No. 125/44/2019-GST, alleging it to be ultra vires Section 54 of the Central Goods and Services Tax Act, 2017. Similar to the challenge to Rule 90, the court did not address this issue extensively as the respondent admitted the unsustainability of the order rejecting the refund application due to limitation. Consequently, the court did not find it appropriate to evaluate the challenge to Circular No. 125/44/2019-GST in this petition.

Challenge to Circular No. 157/13/2021-GST:
Another challenge raised by the petitioner was against Para 3(ii) of Circular No. 157/13/2021-GST, contending it to be ultra vires the order issued under Article 142 of the Constitution by the Supreme Court. However, given the resolution of the issue concerning the rejection of the refund application on limitation grounds, the court did not find it necessary to delve into this challenge in detail.

Refund Application under Section 54 of the Central Goods and Service Tax Act, 2017:
The petitioner filed a refund application under Section 54 of the Central Goods and Service Tax Act, 2017, seeking a refund for a specific period. Despite multiple applications filed by the petitioner due to deficiencies identified by the authorities, the final application was not processed. Subsequently, a notice was issued proposing to reject the refund claim as being beyond the stipulated period under Section 54(2) of the Act.

Rejection of Refund Application on the Ground of Limitation:
The respondent rejected the petitioner's refund application citing it as time-barred. However, upon further scrutiny and subsequent proceedings, the respondent admitted the unsustainability of the rejection order on limitation grounds. The court acknowledged the rectification of the rejection order and found no need for further intervention in this regard.

Exclusion of Time Period for Limitation Calculation:
The respondent acknowledged the exclusion of a specific time period for calculating the limitation for filing a refund application under Section 54 of the Act. This exclusion was based on a notification issued by the Central Board of Indirect Taxes and Customs. The exclusion period was crucial in determining the timeliness of the petitioner's refund application, ultimately leading to the reconsideration of the rejection decision.

Setting Aside of Order Rejecting Refund Application and Remand for Fresh Consideration:
Following the challenges raised and subsequent developments, the order rejecting the petitioner's refund application on limitation grounds was set aside. The matter was remanded to the concerned authority for fresh consideration. The court noted the rectification of the rejection order and concluded that no further orders were necessary, thereby disposing of the petition accordingly.