Facts of the Case

The petitioner, Dr. Reddy's Laboratories Limited, filed multiple refund applications under Section 54 of the Central Goods and Services Tax Act, 2017 seeking refund of Integrated Goods and Services Tax (IGST) paid for the months of July 2018, August 2018, October 2018, and November 2018. The refund applications were rejected by the adjudicating authority on the ground that they were filed beyond the prescribed limitation period. The appellate authority upheld the rejection through separate appellate orders dated 30.05.2022.

Subsequently, the Central Board of Indirect Taxes and Customs (CBIC) issued Notification No. 13/2022-Central Tax dated 05.07.2022, excluding the period from 01.03.2020 to 28.02.2022 while computing the limitation period for filing refund applications under Sections 54 and 55 of the CGST Act. Relying upon this notification, the petitioner approached the Telangana High Court seeking quashing of the appellate orders and restoration of the refund applications for fresh consideration.

 

Issues Involved

  1. Whether the benefit of Notification No. 13/2022-Central Tax dated 05.07.2022 is applicable to refund applications that were earlier rejected as time-barred.
  2. Whether the refund applications filed under Section 54 of the CGST Act, 2017 become maintainable after excluding the COVID-19 period prescribed in the notification.
  3. Whether the rejection orders and appellate orders require reconsideration in light of the revised limitation period.

 

Petitioner's Arguments

  • The petitioner contended that the refund applications were originally rejected only on the ground of limitation.
  • It was argued that Notification No. 13/2022-Central Tax specifically excluded the period from 01.03.2020 to 28.02.2022 while calculating limitation under Section 54 of the CGST Act.
  • In view of the notification, the refund applications would now fall within the prescribed limitation period.
  • Therefore, the rejection orders and appellate orders had become legally unsustainable and deserved to be set aside with a direction to reconsider the refund claims on merits.

 

Respondent's Arguments

  • During the hearing, learned counsel appearing for the tax authorities fairly submitted before the Court that, in view of Notification No. 13/2022-Central Tax dated 05.07.2022, the refund applications filed by the petitioner would now be within the limitation period.
  • Consequently, the respondents did not dispute the applicability of the notification to the petitioner's refund claims.

 

Court Order / Findings

The Telangana High Court observed that the refund applications had originally been rejected solely on the ground of limitation. After issuance of Notification No. 13/2022-Central Tax, the limitation period stood extended by excluding the specified COVID-19 period.

Since both parties accepted that the refund applications would now be within the prescribed limitation period, the Court:

  • Set aside the rejection orders dated 13.09.2021.
  • Quashed the appellate orders dated 30.05.2022.
  • Remanded the matter to the Deputy Commissioner of Central Tax, Ameerpet GST Division, for fresh consideration of the refund applications relating to July, August, October and November 2018.
  • Directed the authority to decide the refund claims in accordance with law.
  • Allowed all the writ petitions without any order as to costs.

 

Important Clarification

This judgment reiterates that Notification No. 13/2022-Central Tax dated 05.07.2022, issued by CBIC, must be given full effect while computing limitation under Sections 54 and 55 of the CGST Act, 2017. Refund applications rejected solely on the ground of limitation are liable to be reconsidered where the benefit of the notification renders such applications within the permissible period.

 

Sections Involved

  • Article 226 of the Constitution of India
  • Section 54 of the Central Goods and Services Tax Act, 2017
  • Section 55 of the Central Goods and Services Tax Act, 2017
  • Integrated Goods and Services Tax Act, 2017
  • Notification No. 13/2022-Central Tax dated 05.07.2022

 

Link to download the order -

https://www.mytaxexpert.co.in/uploads/1784622640_1622compressed.pdf

 

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