M/S. Dr. Reddys Laboratories Limited vs. Deputy Commissioner Of Central Tax

Held

The Court held that in view of Notification No. 13/2022-Central Tax, dated July 5, 2022, which excludes the period from March 1, 2020, to February 28, 2022, for calculating the limitation period for filing refund applications under Section 54 or 55 of the CGST Act, the refund applications of the petitioner would now be considered within time. The Court found the rejection orders dated September 13, 2021, and the appellate orders dated May 30, 2022, to be unsustainable. The Court set aside these orders and remanded the matter back to Respondent No. 1, the Deputy Commissioner of Central Tax, Ameerpet GST Division, Hyderabad, to consider the refund applications dated July 15, 2021, for the months of July, August, October, and November 2018, on their merits, without any objection on the ground of limitation. The ratio decidendi is that statutory notifications providing for exclusion of time periods for procedural compliances, such as filing refund applications, must be given effect to, and rejections based on time-bar, where such exclusions apply, are liable to be quashed.

Facts

The petitioner, M/s. Dr. Reddy's Laboratories Limited, filed refund applications for tax paid under the Integrated Goods and Services Tax Act, 2017, for various months in 2018. These applications were rejected by the Deputy Commissioner of Central Tax (Respondent No. 1) on grounds of delay. The petitioner appealed these rejections to the Additional Commissioner (Appeals-1) (Respondent No. 2), who confirmed the rejections. Subsequently, the Central Board of Indirect Taxes and Customs (CBIC) issued Notification No. 13/2022-Central Tax, dated July 5, 2022, which excluded the period from March 1, 2020, to February 28, 2022, for calculating the limitation period for filing refund applications under Section 54 or 55 of the CGST Act. The petitioner then filed these writ petitions challenging the orders of rejection.

Key Issues

1. Whether the refund applications filed by the petitioner are to be considered within the time limit in view of Notification No. 13/2022-Central Tax, dated 05.07.2022? Petitioner's Argument: The petitioner argued that the aforementioned notification, by excluding the period from March 1, 2020, to February 28, 2022, for the computation of the limitation period for filing refund applications, would render their applications timely. They contended that the rejection orders and the subsequent appellate orders were unsustainable in light of this notification and sought to have the refund applications restored for consideration on merits. Revenue's Argument: Initially, the respondents sought time to obtain instructions. In the subsequent hearing, the counsel for respondents No. 1 and 2 fairly submitted that the refund applications would now be considered within time in view of the notification dated 05.07.2022.