2022 (1) TMI 494 - HC - GST

Refund claim - exclusion of certain period due to COVID pendamic between the said period 15th March 2020 and 2nd October 2021 - Constitutional validity of Rule 90(3) of the Central Goods and Services Tax Rules, 2017 - refund application for the period July 2018 to September 2018 on 21st August 2020 online on the GST portal - application rejected on the ground that there were certain deficiencies in the said application - HELD THAT - It is not in dispute that the first and second refund applications were rejected on the ground of certain deficiencies in those applications filed by the Respondent No.2. The third refund application, which was required to be filed within two years in accordance with the Circular No.20/16/04/18- GST dated 18th November 2019, under Section 54(1) of the Central Goods and Services Tax Act, 2017. The limitation period fell between 15th March 2020 and 2nd October 2021, which period was excluded by the Hon ble Supreme Court in all such proceedings irrespective of the limitation prescribed under the general law or Special Law whether condonable or not till further Order/s to be passed by the Hon ble Supreme Court in those proceedings. Hon ble Supreme Court in IN RE COGNIZANCE FOR EXTENSION OF LIMITATION 2021 (11) TMI 387 - SC ORDER issued further directions that in computing the period of limitation in any Suit, Appeal, Application and or proceedings, the period from 15th March 2020 till 2nd October 2021 shall stand excluded. Consequently the balance period of limitation remaining as on 15th March 2021, if any shall become available with effect from 3rd October 2021. Respondent No.2 is also bound by IN RE COGNIZANCE FOR EXTENSION OF LIMITATION 2021 (11) TMI 387 - SC ORDER and is require to exclude the period of limitation falling during the said period. Since the period of limitation for filing the third refund application fell between the said period 15th March 2020 and 2nd October 2021, the said period stood excluded - The third refund application filed by the Petitioner thus was within the period of limitation prescribed under the said Circular dated 18th November 2019 read with Section 54(1) of the Central Goods and Services Act, 2017. The third refund application filed by the Petitioner before the Respondent No.2 is restored to the file of Respondent No.2 - petition allowed.

Summary

Issues:
Challenge to Rule 90(3) of Central Goods and Services Tax Rules, 2017 | Rejection of third refund application as time-barred | Application of limitation period under Circular dated 18th November 2019 | Extension of limitation period by Supreme Court orders

Analysis:
The petitioner sought a declaration that Rule 90(3) of the Central Goods and Services Tax Rules, 2017 is unconstitutional and the rejection of their third refund application should be set aside. The petitioner filed refund applications which were rejected due to deficiencies, leading to the third application being filed on 30th September 2020. The rejection of this third application on grounds of being time-barred was contested by the petitioner.

The petitioner relied on Supreme Court orders dated 23rd March 2020 and 23rd September 2021, extending the limitation period due to the pandemic. The third application fell within this extended period, as per the petitioner's argument. Reference was made to a Madras High Court judgment supporting the extension of the limitation period in similar cases.

The respondent argued that the first and second applications were rightfully rejected for deficiencies. They contended that the third application was filed after the two-year limitation period prescribed under Circular No.20/16/04/18-GST dated 18th November 2019. However, the Supreme Court's orders extended the limitation period, making the third application timely.

The court noted that the limitation period between 15th March 2020 and 2nd October 2021 was excluded as per the Supreme Court orders, including in cases of refund applications. Consequently, the third application fell within the extended limitation period and should not have been rejected as time-barred. The court quashed the rejection order, restored the third refund application, and directed the respondent to consider it on its merits and in accordance with the law.

The court emphasized that it did not assess the validity of the Circular or Rule 90(3) in this order, leaving it open for consideration in an appropriate case. The parties were instructed to act based on an authenticated copy of the court's order, and no costs were awarded in the matter.