2023 (10) TMI 714 - HC - GST

Refund of excess amount paid by mistake - time limitation - relevant date - removal of defects - Constitutional Validity of procedure under Rule 90 (3) of the Central Goods and Service Tax Rules, 2017 - HELD THAT - The petitioner does not press the challenge of validity of Rule 90 (2) of CGST Rules, 2017 and has referred to judgment of Delhi High Court in a case of BHARAT SANCHAR NIGAM LIMITED VERSUS UNION OF INDIA ORS. 2023 (4) TMI 495 - DELHI HIGH COURT wherein the petitioner impugned the validity of Rule 90 (3) of CGST Rules, 2017. The petitioner was aggrieved by the denial of its request for refund of GST. The claim of the petitioner was that the excess tax was paid for the month of December, 2017 and the petitioner is entitled to refund of the said amount. The above judgment is directly applicable to the facts of the present case, as in the present case, the petitioner initially filed the form GSTR-3B for the month of September on 20.10.2017. But since excess amount was paid by mistake, the petitioner filed refund application dated 18.10.2019 (P-1) i.e within a period of two years and on 01.11.2019, the deficiency memo was issued after two years of filing of the form GSTR-3B. Thus, keeping in view the fact that the petitioner has filed the refund application within a period of two years i.e on 18.10.2019, his second application dated 05.11.2019 after removing the deficiency, could not have been rejected on the ground that it was time barred. The matter is remanded back to the Adjudicating Authority to consider afresh in the light of the observations made by this Court - Petition allowed by way of remand.

Summary

Issues involved:
The issues involved in the judgment are the rejection of a refund claim by the petitioner, the validity of Rule 90(3) of the Central Goods and Service Tax Rules, 2017, and the application of the limitation period for filing refund applications.

Refund Claim Rejection:
The petitioner mistakenly paid excess SGST under reverse charge mechanism while filing form GSTR-3B for September 2017. The petitioner filed a refund application for the excess amount, but it was rejected by the authorities as time-barred, leading to subsequent appeal and the present writ petition.

Validity of Rule 90(3) of CGST Rules, 2017:
The petitioner challenged the validity of Rule 90(3) of the CGST Rules, which requires the filing of a fresh refund application post rectification of deficiencies. The court referred to a judgment where it was observed that deficiencies raised in a deficiency memo should not render the original application as non est if the application is not deficient in material particulars and is accompanied by necessary documentary evidence.

Application of Limitation Period:
The court held that the petitioner's second refund application, filed after rectifying deficiencies, could not have been rejected on the ground of being time-barred. The court emphasized that since the initial refund application was filed within the limitation period, subsequent applications post rectification should not be rejected based on the limitation period.

The judgment allowed the petition, setting aside the orders rejecting the refund claim and remanding the matter back to the Adjudicating Authority for fresh consideration in line with the court's observations.