2024 (10) TMI 132 - HC - GST

Refund of unutilised Input Tax Credit for the month of March 2018 - barred by time limitation or not - HELD THAT - In terms of the amendment in the explanation to Rule 54, relevant date for filing the refund application is provided to be two years from the due date of furnishing GSTR 3B returns. In other words, the last date for filing refund application in the month of March 2018 would be 20.04.2020 being two years from the due date of furnishing GSTR 3B returns. In the present case, the refund application was filed on 27.05.2020, however in view of the above notification, in particular clause (iii) thereof, the period from 01.03.2020 to 28.02.2022 was excluded from the limitation period. The petitioner would be entitled to the benefit of the same. The competent authority is directed to reconsider the claim of refund of the petitioner by applying its mind and pass appropriate order following the Circular dated 05.07.2022 - Petition disposed off.

Summary

Issues:
1. Refund claim under GST Act barred by limitation.
2. Interpretation of relevant date for filing refund application.
3. Impact of notification on computation of limitation period for filing refund application.

Analysis:
1. The petitioner, a company engaged in manufacturing and supply, sought to set aside an order rejecting a refund claim of Rs. 14,39,897 under the GST Act. The petitioner contended that the refund claim was not time-barred and should be decided on merits by the adjudicating authority. The respondent had rejected the claim as time-barred, citing the filing date of 02.05.2020, which was deemed late. The respondent held that the petitioner failed to provide sufficient documents to prove timely filing and dismissed the claim based on available records. The respondent also disregarded the impact of the pandemic on timelines, as per Notification No. 35/2020-Central Tax. The High Court noted the petitioner's argument and directed a reconsideration of the refund claim by the competent authority.

2. The key issue revolved around the interpretation of the relevant date for filing a refund application under Section 54 of the GST Act. The petitioner's claim was related to unutilized Input Tax Credit for supplies made to a unit in the SEZ, which is considered zero-rated supply under Section 16 of the Integrated Goods & Service Tax Act, 2017. The relevant date for filing the refund application was determined to be two years from the due date of furnishing GSTR 3B returns, as per the explanation to Section 54. The High Court highlighted the importance of adhering to the prescribed timelines for filing refund applications and clarified the impact of subsequent amendments and notifications on such deadlines.

3. A significant development during the proceedings was the issuance of Notification No. 13/2022-Central Tax, which excluded the period from 01.03.2020 to 28.02.2022 for the computation of the limitation period for filing refund applications under the GST Act. This notification had a direct bearing on the petitioner's case, as the refund application was filed on 27.05.2020. The High Court acknowledged the applicability of the notification and directed the competent authority to reconsider the refund claim in light of the exclusion period mentioned in the notification. The Court's decision emphasized the importance of considering relevant notifications and circulars that impact the computation of limitation periods for filing refund applications under the GST Act.