2025 (1) TMI 1303 - HC - GST

Refund of tax - rejection of refund claim on the ground of being barred by time limitation - HELD THAT - A cogent reading of Section 54 (1) and Section 54 (3) would make the scheme of the Act clear. The right to claim refund under Section 54 (3) starts from the end of the tax period in which the refund arises. Under Section 54 (1) a dealer is entitled to claim refund of excess taxes within a period of two years from the relevant date. This would be the outer limit within which the dealer is entitled to make a claim for refund. Thus the starting point from when the dealer can make such a request is set out in Section 54 (3) which stipulates that a claim for refund of unutilized input tax credit can be made at the end of tax period and such claim is permissible till the end of two years from the relevant date. In the circumstances it would have to be held that the application filed by the petitioner on 21.03.2024 is beyond the last date of 09.03.2024 within which the application should have been made. Petition dismissed.

1. ISSUES PRESENTED and CONSIDERED

The core legal issue considered by the Court was whether the petitioner's application for a refund of tax under Section 54 of the Central Goods and Services Tax Act, 2017 (CGST Act) was filed within the permissible time limit. Specifically, the question was whether the "relevant date" for calculating the two-year period for filing a refund claim was the date the goods left India or the end of the tax period in which the refund claim arose.

2. ISSUE-WISE DETAILED ANALYSIS

Relevant legal framework and precedents: The legal framework relevant to this issue is Section 54 of the CGST Act, which governs the refund of tax. Section 54(1) allows a person to claim a refund within two years from the "relevant date," which is further defined in Section 54(14). For goods exported by sea, the relevant date is specified as the date the ship leaves India.

Court's interpretation and reasoning: The Court interpreted Section 54(1) and Section 54(14) to determine the relevant date for the petitioner's refund claim. It concluded that the relevant date was the date the ship carrying the exported goods left India, as specified in Section 54(14)(a)(i). The Court rejected the petitioner's argument that the relevant date should be the end of the tax period in which the refund claim arose.

Key evidence and findings: The petitioner exported granite blocks, and the ship left India on 09.03.2022. The petitioner's refund application was filed on 21.03.2024. The Court found that the application was filed beyond the two-year period from the relevant date, which ended on 09.03.2024.

Application of law to facts: The Court applied the definition of the relevant date as provided in Section 54(14) of the CGST Act. It determined that the petitioner's application was untimely because it was filed after the two-year period from the relevant date, which was the date the ship left India.

Treatment of competing arguments: The petitioner argued that the relevant date should be the end of the tax period, based on Section 54(3), which allows for a refund claim at the end of the tax period. The Court rejected this argument, emphasizing that the relevant date for the two-year limitation period is distinctly defined in Section 54(14) and pertains to the date the goods leave India.

Conclusions: The Court concluded that the petitioner's refund application was filed beyond the permissible time limit, as it was not submitted within two years from the relevant date, which is the date the goods were exported.

3. SIGNIFICANT HOLDINGS

Preserve verbatim quotes of crucial legal reasoning: The Court stated, "A cogent reading of Section 54 (1) and Section 54 (3) would make the scheme of the Act clear. The right to claim refund, under Section 54 (3), starts from the end of the tax period in which the refund arises. Under Section 54 (1) a dealer is entitled to claim refund of excess taxes within a period of two years from the relevant date."

Core principles established: The Court established that the relevant date for calculating the two-year period for filing a refund claim under Section 54 of the CGST Act is the date the goods leave India, as specified in Section 54(14). The end of the tax period is not the relevant date for this purpose.

Final determinations on each issue: The Court determined that the petitioner's refund application was untimely and dismissed the writ petition. There was no order as to costs, and any pending interlocutory applications were closed.

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