Bharat Sanchar Nigam Limited vs. Union Of INDIA & Ors.

Held

The Court held that the petitioner's refund application filed on 17.01.2020 was indeed within the period of limitation as stipulated under Section 54 of the CGST Act. The Court found the premise on which the impugned orders were passed to be palpably erroneous, as it was based on the incorrect assumption that the initial application was filed physically and not online, or that it was incomplete. The Court clarified that merely issuing a Deficiency Memo does not render a taxpayer's application non est. If an application is accompanied by the documentary evidence prescribed under Rule 89(2), it cannot be ignored for limitation purposes. The limitation period stops upon the filing of the initial application, even if further clarifications are required. The Court set aside the orders of the Adjudicating Authority and the Appellate Authority and remanded the matter back to the Adjudicating Authority for fresh consideration in light of the Court's observations. The petitioner did not press its challenge to the validity of Rule 89(2) and Rule 90(3) of the Rules.

Facts

The petitioner, Bharat Sanchar Nigam Limited, filed a writ petition challenging an order dated 25.11.2021 by the Additional Commissioner CGST Appeals-II, which rejected its appeal against an order dated 29.04.2020 by the Adjudicating Authority. The petitioner sought a refund of ₹2,63,98,462/- for excess GST paid in December 2017 due to an error in calculating tax liability. The petitioner initially filed a refund application on 17.01.2020. A Deficiency Memo was issued on 31.01.2020, to which the petitioner responded by uploading documents online, which was treated as a fresh application. The Adjudicating Authority rejected the refund claim as time-barred, considering the response to the Deficiency Memo as the application date. The Appellate Authority upheld this decision, erroneously assuming the initial application was filed physically and not online.

Key Issues

1. Whether the petitioner's refund application dated 17.01.2020 was filed within the limitation period prescribed under Section 54 of the CGST Act, considering the issuance of a Deficiency Memo and the subsequent online submission of clarifications. Petitioner's argument: The petitioner contended that its initial application filed on 17.01.2020 was valid and within the limitation period. It argued that the issuance of a Deficiency Memo did not render the original application non est, and the subsequent online submission of clarifications should not be treated as a fresh application for the purpose of limitation. The petitioner asserted that the Adjudicating and Appellate Authorities erred by treating the response to the Deficiency Memo as the application date, ignoring the timely initial filing. Revenue's argument: The respondent contended that the petitioner's first application dated 17.01.2020 was incomplete and therefore could not be processed. They argued that the deficiencies were rectified after the limitation period had expired, making the refund claim invalid. The respondent also relied on Rule 90(3) of the CGST Rules, suggesting that rectification of deficiencies required filing a fresh application.