M/S. Tgv Sraac Limited vs. Assistant Commissioner (St)

Held

The Court allowed the Writ Petition. It held that the refund application was not made beyond the period of limitation. The Court noted that while the revenue contended the application was time-barred, the petitioner argued that the "relevant date" provision in Section 54 of the CGST Act is specifically for exported goods and does not apply to supplies to SEZ units, which are zero-rated sales. Crucially, the Court considered the Notification dated July 5, 2022, issued by the Central Board of Indirect Taxes and Customs, which explicitly states that the computation of the limitation period for filing refund applications under Section 54 or Section 55 shall stand excluded for the period from March 1, 2020, to February 28, 2022. Based on this, the Court concluded that it could not be said that the application for refund was made beyond the period of limitation. Consequently, the order dated October 5, 2021, passed by respondent No.1 was set aside, and the matter was remanded back to respondent No.1 for fresh consideration in accordance with the law. No order as to costs was made.

Facts

The petitioner, engaged in coal trading, sought a refund of tax paid on supplies. They filed a refund application on September 15, 2021, for tax periods July 2017 to March 2018 and April 2018 to March 2019. The respondent No.1 issued a notice for rejection on September 25, 2021, citing limitation. The petitioner replied on October 1, 2021. Subsequently, respondent No.1 passed an order on October 5, 2021, rejecting the refund application as time-barred, relying on Section 54(14) of the CGST Act and a Circular dated July 20, 2021. The petitioner challenged this order through a writ petition, arguing that the concept of "relevant date" under Section 54 of the CGST Act does not apply to Cess refunds, and alternatively, that the impugned Circular is contrary to Supreme Court orders. The petitioner also contended that their refund application was filed within time, especially in light of a subsequent Notification dated July 5, 2022.

Key Issues

1. Whether the concept of "relevant date" in the Explanation to Section 54 of the CGST Act, 2017, has any application to refund claims of Cess under the Goods and Services Tax (Compensation to States) Act, 2017? 2. Whether Circular No.157/13/2021-GST dated 20.07.2021 is illegal, arbitrary, and without authority of law, particularly in its application to quasi-judicial proceedings like refund applications, and if it is contrary to Supreme Court orders in Suo Motu Writ Petition (Civil) No.3 of 2020? 3. Whether the order dated 05.10.2021 passed by respondent No.1, rejecting the petitioner's refund application as barred by time, is in violation of principles of natural justice, illegal, unsustainable, and contrary to Supreme Court orders? 4. Whether the petitioner's application for refund filed on 15.9.2021 is within the time prescribed under Section 54 of the CGST and SGST Acts, 2017? Petitioner's arguments: The petitioner argued that the "relevant date" provision in Section 54 of the CGST Act is not applicable to Cess refunds. They also contended that the impugned Circular is contrary to Supreme Court orders and that their refund application was filed within the time limit, particularly considering the subsequent Notification dated July 5, 2022, which excludes periods for limitation computation. Revenue's arguments: The learned Government Pleader argued that the order passed by the authorities, based on the Circular dated July 20, 2021, is not flawed, and referred to specific clauses of the Circular to support the rejection.