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

Held

The Court held that in view of the subsequent Notification dated July 5, 2022, issued by the Government of India, Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes and Customs, which clearly postulates that for the period March 1, 2020, to February 28, 2022, the computation of the period of limitation for filing refund applications under Section 54 or Section 55 of the said Act shall stand excluded, it cannot be said that the application for refund was made beyond the period of limitation. The Court allowed the Writ Petition, set aside the endorsement dated November 20, 2021, made by Respondent No. 1, and remanded the matter back to Respondent No. 1 for consideration afresh in accordance with law. The ratio decidendi is that subsequent notifications extending the limitation period for filing refund applications must be considered, and rejections based on the prior limitation period, without considering such extensions, are unsustainable.

Facts

The petitioner, engaged in coal trading, filed a refund application on November 19, 2021, for the tax period April 2019 to August 2019, under Section 54 of the CGST Act and AP GST Act, read with Rule 89 of GST Rules. Respondent No. 1 rejected the application on November 20, 2021, citing it as barred by limitation under Section 54(14) of the CGST Act and Circular No. 157/13/2021-GST dated July 20, 2021. The petitioner challenged this rejection, arguing that the concept of 'relevant date' under Section 54 does not apply to Cess refunds and that the rejection violated principles of natural justice and Supreme Court orders. The petitioner also relied on a subsequent notification dated July 5, 2022, which excluded a period for computing the limitation for refund applications.

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? AND Whether the Circular No. 157/13/2021-GST dated 20.07.2021 is contrary to the orders of the Hon'ble Supreme Court in Suo Motu Writ Petition (Civil) No.3 of 2020, particularly concerning quasi-judicial proceedings like refund applications? AND Whether the petitioner's refund application filed on 19.11.2021 for the period April 2019 to August 2019 is within the time prescribed under Section 54 of the CGST and SGST Acts, 2017, considering the subsequent notification dated 05.07.2022? The petitioner argued that the 'relevant date' provision in Section 54 is only for exported goods and not for supplies to SEZ units, which are zero-rated sales. They also contended that the rejection violated natural justice and Supreme Court orders, and that the subsequent notification of July 5, 2022, which excluded a period for limitation computation, validated their claim. The revenue contended that the rejection was based on the Circular dated July 20, 2021, and that there was no illegality in the order passed by Respondent No. 1.