Time period between 15.03.2020 and 02.10.2021 would stand excluded for the purpose of determining the period of limitation for filing refund application under GST: Bombay High Court

[Gaurav Gupta]

The Hon'ble Bombay High Court has, in the case of SAIHER SUPPLY CHAIN CONSULTING PVT. LTD. VERSUS THE UNION OF INDIA & THROUGH THE SECRETARY, MINISTRY OF LAW AND JUSTICE, NEW DELHI, ASSISTANT COMMISSIONER OF CGST AND CENTRAL EXCISE DIVISION-X, MUMBAI [2022 (1) TMI 494 - BOMBAY HIGH COURT] passed an important ruling under Goods and Services Tax with respect to determination of limitation period for filing of refund application under Section 54 of the Central Goods and Services Tax Act (hereinafter referred to as "CGST Act"). 

The Hon'ble Court in its ruling delivered on 10.01.2022, held that the Respondent No. 2, being Ld. Assistant Commissioner of CGST, Mumbai- East Commissionerate is bound by the orders passed by Hon'ble Supreme Court, from time to time in the matter of: IN RE : COGNIZANCE FOR EXTENSION OF LIMITATION - 2020 (5) TMI 418 - SC Order and that the Respondent No. 2 is required to exclude the period of limitation falling during the time the order of Supreme Court was in operation. 

Brief Facts

The brief facts of the case, were that the Petitioner had filed a refund application, which was rejected on ground of certain deficiencies. Thereafter a second refund application came to be filed which also attained the same fate on ground of certain deficiencies pointed out by Department. The third refund application came to be filed by the Petitioner, on 30.09.2020 was rejected, this time on the ground that same was time barred. 

Case made out by the Petitioner

The Petitioner argued for restoration of their third refund application and placed extensive reliance on the orders passed by Supreme Court in the matter of In Re: Cognizance for extension of limitation (orders dated 23.03.2020 and 23.09.2021). By virtue of these orders, the Hon'ble Supreme Court had extended the period of limitation, irrespective of limitation prescribed under general law or special laws, whether condonable or not. These orders were passed by Court in excercise of its power under Article 142 read with Article 141 of the Constitution of India.

Case of the Respondents

According to the Respondents, since it was an admitted position that the third refund application was filed after period of two years time prescribed under Section 54(1) and Circular of CBIC dated 18.11.2019, the refund application was rightly rejected.

Ruling:

The Hon'ble Court held that the limitation period for third refund application fell between 15.03.2020 and 02.10.2021, which period was excluded by Hon'ble Supreme Court in all such proceedings irrespective of the limitation period prescribed under the general law or special law whether condonable or not till further orders to be passed by Hon'ble SC in those proceedings. Further, by virtue of order IN RE: COGNIZANCE FOR EXTENSION OF LIMITATION [2021 (11) TMI 387 - SC ORDER], the Hon'ble SC issued further directions that in computing the period of limitation in any suit, appeal, application and or proceedings, the period from 15.03.2020 till 02.10.2021 shall stand excluded. The balance period of limitation would begin to run from 02.10.2021.

In view of the aforesaid, the Hon'ble Court directed that limitation period falling between 15.03.2020 and 02.10.2021 stood excluded for the purpose of determination of limitation period for refund application, and that Respondent No. 2 is bound by the Supreme Court orders. The third refund application was well within time and is accordingly restored to the file of Respondent No. 2.

In the above case, the Petitioner had also challenged the vires of Rule 90(3) of the CGST Rules, however, the Court declined to go into its validity and also the validity of the Circular in its order and observed that the same can be considered in appropriate case.

Comment

The ruling of Hon'ble Bombay High Court provides a much needed relief for the business community.

Earlier, the Hon'ble Madras High Court (SB) had, in the case of M/s. GNC Infra LLP Versus Assistant Commissioner (Circle) - 2021 (11) TMI 973 - MADRAS HIGH COURT, therein granting relief to the assessee by holding that the orders of Supreme Court in the limitation case, enures to the benefit of the writ petitioner for the purpose of determining the limitation period for refund application under GST.