M/S Supernova Engineers Limited vs. Joint Commissioner (Appeals)

Held

The Court held that the refund application filed by the petitioner on 02.05.2020 was not barred by limitation. The Court took into consideration Notification No. 13/2022-Central Tax dated 05.07.2022, which explicitly excluded the period from 01.03.2020 to 28.02.2022 for the computation of the limitation period for filing refund applications under Section 54 of the CGST Act. The Court found that the petitioner was entitled to the benefit of this notification. Consequently, the order passed by the Joint Commissioner (Appeals) rejecting the refund claim on the grounds of limitation was set aside. The Court directed the competent authority to reconsider the petitioner's refund claim by applying its mind and passing an appropriate order in light of the aforesaid notification dated 05.07.2022. The ratio decidendi is that subsequent government notifications extending limitation periods for filing refund applications must be applied, and claims should not be rejected solely on limitation grounds if such extensions are applicable.

Facts

The petitioner, M/s Supernova Engineers Limited, filed a writ petition challenging an order dated 29.01.2021 by the Joint Commissioner (Appeals), Central GST. The petitioner sought to set aside this order, allow a refund of Rs. 17,50,227/-, and declare their refund claim not barred by limitation. The petitioner, engaged in manufacturing and supplying gensets, made a zero-rated supply to an SEZ unit in February 2018. The refund application was filed on 02.05.2020. The adjudicating authority and the Joint Commissioner (Appeals) rejected the refund claim primarily on the grounds of limitation, holding that the application was filed after the expiry of two years from the relevant date. The petitioner argued that the refund claim was not time-barred, especially considering subsequent government notifications.

Key Issues

1. Whether the refund application filed by the petitioner on 02.05.2020 for unutilised Input Tax Credit pertaining to supplies made in February 2018 is barred by limitation under Section 54(3) of the Central Goods and Service Tax Act, 2017 (CGST Act)? Petitioner's contention: The petitioner argued that their refund claim was not barred by limitation. They relied on the subsequent Notification No. 13/2022-Central Tax dated 05.07.2022, which excluded the period from 01.03.2020 to 28.02.2022 for the computation of the limitation period for filing refund applications under Section 54 of the Act. They also implicitly relied on the principle that the amended explanation to Section 54, which defines the relevant date, should be considered. Revenue's contention: The revenue, through the Joint Commissioner (Appeals), contended that the refund application filed on 02.05.2020 was time-barred as it was filed beyond the two-year period from the relevant date. The appellate authority noted that the petitioner had not submitted sufficient documents or attended personal hearings before the adjudicating authority to support their claim regarding the time limit extension due to the pandemic (Notification No. 35/2020-Central Tax dated 03-04-2020).