M/S Gtl Infrastructure Limited, Through Its Authorized Representative, Dharam Nath Jha vs. The State Of Jharkhand

Held

The Court held that the limitation period prescribed under Section 54 of the CGST/Jharkhand GST Act is not mandatory in the context of refunding pre-deposited amounts after an appeal has been allowed in favour of the assessee. The Court followed its own Division Bench judgment in M/s. BLA Infrastructure Private Limited v. The State of Jharkhand and others, which interpreted Section 54 of the Act. The Court drew inspiration from the Supreme Court's interpretation of the word 'may' in Rakesh Ranjan Shrivastava Vs. State of Jharkhand & Anr., emphasizing that the legislative intent and context are crucial. The Court found that retaining the pre-deposit amount would amount to undue enrichment of the State, which is impermissible. The Court also noted that the Delhi High Court's view, while persuasive, was not binding on this Court. The petition was allowed, directing the respondents to refund the pre-deposit amount within four weeks, failing which interest at 6% per annum would be payable.

Facts

The petitioner, M/s. GTL Infrastructure Limited, filed a writ petition before the Jharkhand High Court seeking directions for the processing of its refund application for a pre-deposited amount. This pre-deposit was made to maintain an appeal under Section 107 of the GST Act. The refund application was rejected by an automated order dated 07.06.2024 on the grounds of limitation as prescribed under Section 54 of the CGST/Jharkhand GST Act. The petitioner sought quashing of deficiency memos issued in Form GST RFD-03 dated 07.06.2024 and 02.08.2024, and a direction for the refund of the pre-deposit amount with statutory interest.

Key Issues

1. Whether the limitation period prescribed under Section 54 of the CGST/Jharkhand GST Act is mandatory for processing refund applications of pre-deposited amounts made for filing appeals. The petitioner argued that the rejection of the refund application on grounds of limitation was incorrect, especially since the appeal had been allowed. They contended that withholding the pre-deposit amount after the appeal was allowed, without reasonable cause, would be hit by Article 265 of the Constitution of India, which prohibits the levy or collection of tax except by authority of law. The petitioner relied on the Division Bench judgment of the same court in M/s. BLA Infrastructure Private Limited v. The State of Jharkhand and others. The respondents (State) contended that a contrary view was taken by the Delhi High Court in Sethi Sons (India) v. Assistant Commissioner and Others. They sought to rely on the limitation prescribed under Section 54.