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2024 (1) TMI 1052 - HC - GSTRefund in respect of unutilised Input Tax Credit (ITC) - time limitation - HELD THAT - The refund claim of the petitioner was made within the period of limitation prescribed by statute. As regards the entitlement of the petitioner to refund, such entitlement has to be determined not only with reference to Section 54 of the CGST Act read with Rule 89 thereof, but also by examining relevant documents relating to untilised ITC and exports. This exercise cannot be undertaken in exercise of discretionary jurisdiction under Article 226 of the Constitution of India. The appellate authority concluded that the refund claim can only be made with regard to a specific calendar month. This conclusion is contrary both to statutory prescription and Circular No.37. Therefore, the order impugned is unsustainable and is hereby quashed - it does not follow from the conclusion that the refund claim is within the time limit specified by statute that the petitioner is entitled to refund. Such entitlement should be established by the petitioner with reference to relevant documents and applicable provisions. For such purpose, the matter is remanded to the 2nd respondent. Petition disposed off way of remand.
Issues:
The judgment involves the refusal of a refund claim by the petitioner in relation to unutilised Input Tax Credit (ITC) under the Integrated Goods and Services Tax Act, 2017 (IGST Act) and Central Goods and Services Tax Act, 2017 (CGST Act). Issue 1: Refund Claim and Calculation Methodology The petitioner, an exporter of processed tea, availed ITC for tea procurement and claimed a refund for the period from July 2017 to November 2017. The petitioner's refund calculation was based on ITC attributable to exports made monthly, resulting in a lower refund claim. Additional refund claims for May 2018 and July 2017 to November 2017 were rejected. The appellate authority affirmed the rejection, leading to the current writ petition challenging the appellate order. Issue 2: Statutory Provisions and Circular Interpretation The petitioner argued that the refund claim was made within the two-year period as per Section 54 of the CGST Act, computed from the date of export. Citing Circular No.37/11/2018-GST, the petitioner contended that clubbing refund claims for multiple months is permissible, contrary to the appellate authority's decision. The petitioner relied on a Delhi High Court judgment to support the claim that refund claims can span multiple financial years. Issue 3: Entitlement to Refund and Assessment The Senior Standing Counsel opposed the petitioner's claim, asserting that the refund claim for June 2018 was accepted but rejected for earlier periods. The counsel argued that claims spanning multiple financial years are impermissible. The entitlement to refund, according to the counsel, requires factual assessment beyond the scope of the current proceedings. The Court noted that the refund application was made within the prescribed two-year period from the relevant export date. Circular No.37 allows clubbing of refund claims for multiple months, and the restriction on claims spanning financial years was invalidated by a Delhi High Court decision. The appellate authority's conclusion that refund claims must be specific to a calendar month was found to be contrary to statutory provisions and the circular. Consequently, the appellate order was quashed, and the matter remanded for the 2nd respondent to reevaluate the refund application considering the observations in the order, with a directive to complete the process within two months.
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