M/S. Gandhar Oil Refinery (INDIA) Limited vs. Assistant Commissioner Of Sales Tax

Held

The Court held that the refund application was not made beyond the period of limitation. The Court noted that while the Government Pleader argued the application was beyond two years, the petitioner pointed out that the 'relevant date' definition in Section 54 of the CGST Act primarily pertains to exported goods, with no specific provision for SEZ supplies. Crucially, the Court considered the Notification dated 05.07.2022, which clearly excludes the period from March 1, 2020, to February 28, 2022, for the computation of the limitation period for filing refund applications under Section 54 or Section 55 of the Act. Based on this, the Court concluded that the order under challenge was erroneous. The Court set aside the impugned order and remanded the matter back to the first respondent for fresh consideration in accordance with the law. The writ petition was disposed of accordingly.

Facts

The petitioner, engaged in trading coal, sought a refund of tax paid on supplies for the period May 2018 to May 2019, filing an application on September 22, 2021. The first respondent issued a show cause notice on October 12, 2021, proposing to reject the refund application as barred by limitation, citing Section 54(14) of the CGST Act and Circular No.157/13/2021-GST dated July 20, 2021. Subsequently, the first respondent passed an order on June 16, 2022, rejecting the refund application on grounds of being time-barred. The petitioner challenged this order and the aforementioned circular through a writ petition.

Key Issues

1. 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.03 of 2020, particularly concerning quasi-judicial proceedings like refund applications. 2. Whether the order dated 16.06.2022 passed by the first respondent, rejecting the petitioner's refund application as barred by time, is illegal, improper, and incorrect in view of the orders passed by the Hon'ble Supreme Court and subsequent notifications. Petitioner's arguments: The petitioner contended that the rejection of the refund application is bad in law in light of Notification dated 05.07.2022. They also argued that the 'relevant date' for determining limitation, as prescribed in Section 54 of the CGST Act, is only for goods exported out of India, and there is no specific provision for determining the 'relevant date' for supplies to SEZ units, which are considered zero-rated sales under Section 16 of the IGST Act. Revenue's arguments: The learned Government Pleader argued that the order passed by the authorities, based on Circular dated 20.07.2021, is not flawed. They referred to Clauses 3(iii) and 4(b) of the circular to support their contention that there was no illegality in the first respondent's order.