Jai Mata Di Industries vs. Union Of INDIA & Ors.

Facts

The petitioner, Jai Mata Di Industries, filed an application for GST refund on November 5, 2020, for the period May 2018 to March 2019. The application faced multiple deficiency memos, leading to the petitioner filing fresh applications on January 27, 2021, February 22, 2021, and finally on April 27, 2021. The revenue authority issued a notice on May 28, 2021, proposing to reject the refund claim as being time-barred under Section 54(2) of the CGST Act. The petitioner's response was deemed unsatisfactory, and the refund application was rejected on July 28, 2021. Subsequently, the petitioner appealed this order, which was set aside and remanded for fresh consideration. The revenue conceded that the rejection order was unsustainable.

Held

The Court noted that the petitioner's primary grievances regarding the rejection of their refund application on grounds of limitation were addressed. The revenue conceded that the order dated July 28, 2021, rejecting the refund claim as time-barred, was unsustainable. This concession was based on a notification dated July 5, 2022, which mandates the exclusion of the period from March 1, 2020, to February 28, 2022, for calculating the limitation period for filing refund applications under Section 54 of the CGST Act. In light of this concession and the subsequent setting aside and remand of the rejection order, the Court found that the petitioner's challenge to Rule 90(3) and Circular No. 125/44/2019-GST was no longer necessary to examine. Since the core issue concerning the refund rejection was resolved, the Court deemed no further orders required in the petition.

Key Issues

1. Whether Rule 90(3) of the Central Goods and Services Tax Rules, 2017, is ultra vires Section 54 of the Central Goods and Services Tax Act, 2017, to the extent it requires filing of a 'fresh' application in case of a deficiency? 2. Whether Para 12 of Circular No. 125/44/2019-GST dated November 18, 2019, is ultra vires Section 54 of the Central Goods and Services Tax Act, 2017? Petitioner's arguments: The petitioner contended that Rule 90(3) and Para 12 of Circular No. 125/44/2019-GST are ultra vires Section 54 of the Act. They also argued that Para 3(ii) of Circular No. 157/13/2021-GST is ultra vires the Supreme Court's order in Re Cognizance for Extension of Limitation. Revenue's arguments: The revenue conceded that the order rejecting the petitioner's refund application on the ground of limitation was unsustainable. They submitted that in view of a notification dated July 5, 2022, the period from March 1, 2020, to February 28, 2022, should be excluded for computing the limitation period under Section 54 of the Act.