Homag INDIA Private Limited vs. The Joint Commissioner

Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record.

A perusal of the material on record will indicate that on 04.07.2024, the petitioner filed a refund application within a period of two years from 26.07.2022 and the same is in terms of Section 54(3) of the CGST Act. Respondents issued a deficiency memo to the said refund application on 18.07.2024 and one more refund application was filed on 14.08.2024, which was rejected by the respondents on the ground that the said refund application having been filed on 14.08.2024 was beyond the period prescribed under Section 54(3) of the CGST Act and the same is liable to be dismissed. The appeal filed by the petitioner was also dismissed by respondent No.1, aggrieved by which the petitioner is before this Court by way of the present petition.

In this context, in the case of M/s. Amidc Automation HC-KAR NC: 2025:KHC:53116 Customs and Others – W.P.No.16978 of 2025 dated 30.10.2025, this Court has held as under:

I find that the claimant have file the said refund application under Section 54 read with Section 77 of CGST Act, 2017 read with sub rule (1A) of Rule 89 of CGST Rules, 2017 read with Section 20 of IGST Act, 2017. 13. Section 77 of CGST Act, 2017 is reproduced below: “(1) A registered person who has paid the Central tax and State tax or, as the case may be, the Central tax and the Union territory tax on a transaction considered by him to be an intra-State supply, but which is subsequently held to be an inter-State supply, shall be refunded the amount of taxes so paid in such manner and subject to such conditions as may be prescribed.” HC-KAR NC: 2025:KHC:53116 i Sub Rule (1A) of Rule 89 of the CGST Rules, 2017 states as follows: “(1A) Any person, claiming refund under section 77 of the Act of any tax paid by him, in respect of a transaction considered by him to be an intra-State supply, which is subsequently held to be an inter- State supply, may before the expiry of a period of two years from the date of payment of the tax on the inter- State supply, file an application electronically in FORM GST RFD-01 through the common portal, either directly or through a Facilitation Center notified by the Commissioner.: Provided that the said application may, as regard to any payment of tax on inter-State supply before coming into force of this sub-rule, be filed before the expiry of a period of two years from the date on which this sub-rule comes into force.”

Provision of Time limit: i. The instant refund claim has been filed on 16.01.2025 for the tax period of January, 2019 to March, 2022 under Section 77 of CGST Act, 2017 read with sub rule (1A) of Rule 89 of the CGST Rules, 2017 read with Section 20 of the IGST Act, 2017. ii. Rule 89 (1A) has been inserted vide notification no.35/2021-CT dated: 24.09.2021 and it has come into force w.e.f. 24.9.2021. iii. Accordingly, it is opined that the instant refund claim should have been filed within 2 years from 24.9.2021 i.e., the refund claim should have been filed on or before 23.9.2023. iv. Further, I also find that Notification No.13/2022- Central Tax dated: 05.07.2022 ha been issued providing relaxation in time limit for filing refund application on account of COVID crisis and the period from March, 2020 to February, 2022 has been excluded for computing the time limit. The same is reproduced below: ii. …… iii. …… HC-KAR NC: 2025:KHC:53116 iv. “excludes the period from the 1st day of March, 2020 to the 28th day of February, 2022 for computation of period of limitation for filing refund application under section 54 or section 55 of the said Act.”

On plain reading of the above-discussed provisions, I find that as per sub-rule (1A) of Rule 89 time limit for filing the refund was due on or before 24.09.2021 and in terms of Notification No.13/2022- CT dated: 05.07.2023, the time limit was up to February, 2024. However, in the instant issue I find that the claimant have filed the said refund claim on 16.01.2025 whereas, they should have filed the refund claim on or before 28.02.2024. Hence, the instant refund claim is hit by time bar.

I find that the claimant have mentioned that there was not mistake on their part and that there was juri ictional issue and that there was no error committed at their end. In this regard I draw attention to Trade Notice No. 01/2017 Central Tax dated: 20.06.2017 issued by the Principal Chief Commissioner, Bengaluru Zone, wherein, the juri iction of each Commissionerate has been mentioned with pin codes. The claimant could have gone through the said trade notice and seen that their unit is mapped in the correct juri iction, they cannot claim ignorance on their part in this regard. Hence, the contention of the claimant that their was no error on their part is not tenable. The case laws cited by the claimant do not come to their rescue.

In view of the above-detailed discussions and findings, I pass the following order. Order I reject the refund claim filed vide ARN AA290125040841E dated: 16.01.2025 M/s AMIDC AUTOMATION TECHNOLOGIES PRIVATE LIMITED, 2nd STAGE, RING ROAD, 19/A, INDUSTRIAL SUBURB, DR. RAJKUMAR SAMADHI ROAD, GORGUNTEPALYA, BANGALORE – 560022 for an amount of Rs.1,97,60,852/- (IGST-Rs. 97,33,753/-, CGST-Rs. 49,45,284/- & SGST-Rs. 50,81,815/-) for the period January, 2019 to March, 2022 as ‘Time- barred.’ HC-KAR NC: 2025:KHC:53116

As rightly contended by the learned counsel for the petitioner, the undisputed fact borne out from the material on record is that the petitioner has initially filed refund application as long back as on 09.05.2023 well within the period of limitation for the period from January-2019 to March-2021 and the same has not been considered by passing the impugned order. So also, despite specifically stating at paragraph No.15 that the refund claim ought to have been filed on or before 28.02.2024 by the petitioner for the period from January-2019 to March-2021, the respondent failed to consider and appreciate that the petitioner has actually filed refund claim on 28.02.2024 itself, which is also not considered by the respondent while passing the impugned order. It is also relevant to state that though the respondent refers exclusion of time referred by the Apex Court relating to Covid-19 pandemic exigency in terms of Notification-13/2022 dated 05.07.2022, excluding period of limitation from March-2020 to February-2022. The said exclusion which would clearly enure to the benefit of the petitioner has not been considered or appreciated by respondent No.2, who erroneously rejected the claim of the petitioner as barred by limitation, which is contrary to law, provisions of the Act and the material on record, warranting interference by this Court in the present petition.

In the result, I pass the following: ORDER a. The petition is allowed. HC-KAR NC: 2025:KHC:53116 b. The impugned order at Annexure-S dated 21.02.2025 passed by respondent No.2 is hereby set aside. c. It is held that the refund claim of the petitioner vide several refund applications commencing from 09.05.2023 up to 03.02.2025 are not barred by limitation and the same are within time. d. Respondents are directed to consider the claim of the petitioner and pass appropriate orders together with applicable interest, as expeditiously as possible and at any rate, within a period of three months from the date of receipt of a copy of this order, without reference to limitation, which stands concluded in favour of the petitioner by this order.”

In the instant case, the undisputed material on record will indicate that the petitioner initially filed a refund application on 04.07.2024 which was well within the prescribed period as contemplated under Section 54(3) of the CGST Act and it was that date on which the petitioner filed the refund application has to be considered for the purpose of computing period of limitation and not subsequent revised refund application filed by the petitioner pursuant to the deficiency memo issued by the respondents, which is clearly incorrect and consequently, the said finding recorded by the respondents is erroneous and matter deserves to be quashed. HC-KAR NC: 2025:KHC:53116

In the result, I pass the following: ORDER