M/S Anya Traders vs. Union Of INDIA And 3 Others

Facts

The petitioner, M/s Anya Traders, is aggrieved by an order dated 27.10.2021 passed by respondent no. 3 (appellate authority), which rejected their refund claim due to belated application. The petitioner had filed refund applications for tax periods April-June 2018, July-September 2018, and October-December 2018. The impugned order noted that the limitation period for filing refund applications, as per Section 54(1) of the CGST/UPGST Act, expired in September 2020, and even extended departmental periods expired on 30.11.2020. The petitioner's application was filed on 31.03.2021, leading to its rejection on grounds of delay by respondent no. 4 (original authority). The petitioner argued that the Supreme Court's order dated 10.01.2022, excluding the period from 15.03.2020 to 28.02.2022 for limitation purposes, should apply.

Held

The Court held that the refund application of the petitioner could not have been rejected by respondent no. 4 merely on the ground of delay, ignoring the Supreme Court's order dated 10.01.2022. The Supreme Court had directed the exclusion of the period from 15.03.2020 till 28.02.2022 for the purposes of limitation under any general or special laws in respect of all judicial or quasi-judicial proceedings. The Court found that the impugned order, which rejected the refund on the basis of delay without considering this exclusion, could not be sustained. The reasoning was that the Supreme Court's order was passed to mitigate the adversities faced by litigants due to the COVID pandemic, and it explicitly extended the limitation periods. Consequently, the impugned order was quashed. The matter was remitted back to respondent no. 4 to decide the refund application afresh in accordance with law, by passing a reasoned and speaking order, preferably within six weeks after affording a reasonable opportunity of hearing to the petitioner. The ratio decidendi is that the Supreme Court's COVID-related exclusion period for limitation must be applied to GST refund applications, preventing their rejection solely on delay during that period.

Key Issues

1. Whether the refund application filed by the petitioner on 31.03.2021 for tax periods April-June 2018, July-September 2018, and October-December 2018 was belated, considering the exclusion period directed by the Supreme Court. (Mixed question of law and fact, turning on Section 54(1) of the CGST/UPGST Act and the Supreme Court's order dated 10.01.2022). Petitioner's contentions: The petitioner argued that the refund application was filed during the COVID period, and a subsequent circular dated 05.07.2022 by the CBIC should be applied. They also relied on a coordinate bench's order in Writ Tax No. 173 of 2022, which in turn relied on the Supreme Court's order dated 10.01.2022. This Supreme Court order excluded the period from 15.03.2020 to 28.02.2022 for calculating limitation periods in judicial and quasi-judicial proceedings. Therefore, the rejection of the refund application on grounds of delay was arbitrary. Respondent's contentions: The learned Standing Counsel for the department could not dispute the applicability of the exclusion period from 15.03.2020 to 28.02.2022 as provided by the Supreme Court.