M/S. Kanthika Exports vs. The Assistant Commissioner Of State Tax

Held

The Court held that the impugned order rejecting the refund claim needed interference. The rejection was based on a Government Notification dated 14.12.2020, which extended the time limit only up to 31.03.2021. However, the Court noted that this notification predated the Supreme Court's order dated 29.03.2021. The Court emphasized that the directions of the Supreme Court would ultimately prevail. Specifically, the Supreme Court's order clearly indicated that for computing the period of limitation for any suit, appeal, application, or proceeding, the period from 15.03.2020 till 02.10.2021 shall stand excluded. Since the petitioner's application for refund was filed on 23.04.2021, they were entitled to the benefit of the Supreme Court's order. Consequently, the Court set aside the impugned order and remanded the matter to the first respondent for passing fresh orders on the petitioner's refund claim expeditiously, preferably within two months.

Facts

The petitioner, M/s. Kanthika Exports, filed a writ petition challenging the order dated 22.10.2021 passed by the Assistant Commissioner of State Tax, Ongole, rejecting their refund claim for the tax period April 2018 to February 2019. The refund application was filed on 23.04.2021. The rejection was based on the ground that the refund application was filed beyond the statutory period, as extended by government notifications. The petitioner argued that the Supreme Court's order on extension of limitation due to the pandemic should apply. The respondents contended that the extension granted by notifications was only until 31.03.2021, and the petitioner filed the claim on 12.04.2021, making it time-barred.

Key Issues

1. Whether the rejection of the petitioner's refund claim for the period April 2018 to February 2019, filed on 23.04.2021, was proper, considering the Supreme Court's order on extension of limitation due to the pandemic, and the relevant notifications and circulars issued by the Government of India and the Central Board of Indirect Taxes and Customs? Petitioner's arguments: The petitioner contended that the refund application was filed within the extended period of limitation as per the Supreme Court's suo motu cognizance in SMW(C) No.3 of 2020 (RE COGNIZANCE FOR EXTENSION OF LIMITATION), specifically referencing the order dated 10.01.2022 and the exclusion of the period from 15.03.2020 till 02.10.2021. They also relied on notifications from the Ministry of Finance and circular instructions from the CBIC, particularly para 4(b) of circular No 157/13/2021-GST dated 20.07.2021. They argued the rejection was arbitrary, without jurisdiction, against principles of natural justice, and contrary to the CGST Act. Respondents' arguments: The respondents argued that the refund claim was filed after the extended period stipulated by Government Notification No.2/21 dated 14.12.2020, which extended the time for activities falling between 20.03.2020 and 30.03.2021 only up to 31.03.2021. They asserted that the petitioner filed the claim on 12.04.2021, which was beyond this extended date, and therefore, the petitioner was not entitled to the refund.