Facts of the Case

The petitioner, Rotomag Motors and Controls Pvt. Ltd., filed a refund application under Section 54 of the Central Goods and Services Tax Act, 2017 seeking refund of CGST. The GST authorities rejected the refund claim by an order dated 14.03.2022, holding that the application had been filed beyond the prescribed limitation period under Section 54.

Aggrieved by the rejection, the petitioner approached the Gujarat High Court by filing a Special Civil Application challenging the refund rejection order.

Issues Involved

  1. Whether the GST refund application filed by the petitioner was barred by limitation under Section 54 of the CGST Act.
  2. Whether the benefit of Notification No. 13/2022-Central Tax dated 05.07.2022, issued under Section 168A of the CGST Act, excluding the COVID-19 period from computation of limitation, was applicable to refund applications.
  3. Whether the refund rejection order could survive after issuance of the above notification.

Petitioner's Arguments

  • The petitioner submitted that the refund application was wrongly rejected as time-barred.
  • It was argued that Notification No. 13/2022-Central Tax dated 05.07.2022, issued under Section 168A of the CGST Act, specifically excluded the period from 01.03.2020 to 28.02.2022 while computing limitation for filing refund applications under Sections 54 and 55.
  • Therefore, once the excluded period was taken into consideration, the refund application was well within the prescribed limitation.
  • Consequently, the impugned order rejecting the refund deserved to be quashed.

Respondent's Arguments

  • During the hearing, the State could not dispute the applicability of Notification No. 13/2022-Central Tax.
  • The respondents accepted that the notification excluded the COVID period while calculating limitation for filing refund applications under Section 54.

Court Order / Findings

The Gujarat High Court observed that Notification No. 13/2022-Central Tax, issued under Section 168A of the CGST Act, expressly excluded the period from 01.03.2020 to 28.02.2022 while computing limitation for filing refund applications under Sections 54 and 55.

Since the petitioner's refund application fell within the extended limitation after giving effect to the notification, the rejection solely on the ground of limitation was legally unsustainable.

Accordingly, the Court:

  • Set aside the refund rejection order dated 14.03.2022.
  • Directed the competent GST authority to treat the refund application as filed within limitation.
  • Directed the authority to process the refund claim in accordance with law.
  • Directed that statutory interest be granted if the petitioner was otherwise eligible.
  • Directed completion of the entire exercise within 12 weeks from receipt of the Court's order.

Important Clarification

  • Notification No. 13/2022-Central Tax applies not only to adjudication proceedings but also to limitation for filing GST refund applications.
  • The period from 01.03.2020 to 28.02.2022 must be excluded while computing limitation for refund applications under Sections 54 and 55.
  • Refund applications cannot be rejected merely because they appear delayed without considering the statutory COVID exclusion period.
  • Authorities are required to recalculate limitation after giving effect to the notification before rejecting any refund claim.

Sections Involved

  • Section 54 of the Central Goods and Services Tax Act, 2017
  • Section 168A of the Central Goods and Services Tax Act, 2017
  • Section 55 of the Central 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/1785313880_2199compressed.pdf

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