M/S Kbs Motors Private Limited vs. Union Of INDIA And Others

Facts

The petitioner, M/s KBS Motors Private Limited, filed a writ petition challenging an order dated 01.07.2022, which rejected their application for a refund of tax paid. The rejection was based on the ground that the refund application was filed beyond the statutory two-year limitation period. The petitioner argued that a notification issued by the Central Board of Indirect Taxes and Customs (CBIC) dated 05.07.2022, which excluded the period from March 1, 2020, to February 28, 2022, from the computation of limitation, was applicable. The petitioner's refund application was filed in May 2021. The revenue did not dispute the issuance or applicability of this notification.

Held

The Court held that the order rejecting the petitioner's claim for refund could not be sustained. The Court found that the notification dated 05.07.2022, issued by the CBIC, which excluded the period from March 1, 2020, to February 28, 2022, from the computation of limitation for refund applications under Sections 54 and 55 of the Act, was applicable to the petitioner's case. Since the revenue did not dispute the issuance or applicability of this notification, the petitioner's argument that their refund application, filed in May 2021, was not barred by limitation was accepted. The Court quashed the impugned order(s) and directed respondent No.3, the Deputy Commissioner, Central Goods and Services Tax Division, Ambala City, to re-consider the petitioner's claim for refund expeditiously in light of the notification dated 05.07.2022. The ratio decidendi is that statutory notifications extending limitation periods, especially those related to periods of disruption, must be given effect to, and refund applications should be evaluated accordingly.

Key Issues

1. Whether the petitioner's application for refund, filed in May 2021, is barred by limitation, considering the statutory two-year period. 2. Whether the notification dated 05.07.2022, issued by the CBIC, which excludes the period from March 1, 2020, to February 28, 2022, for the purposes of limitation under Sections 54 and 55 of the Act, is applicable to the petitioner's refund claim. Petitioner's Arguments: The petitioner contended that the refund application was filed within the extended limitation period due to the exclusion of the period from March 1, 2020, to February 28, 2022, as per the CBIC notification dated 05.07.2022. They argued that the notification squarely applied to their case, and therefore, the rejection on grounds of limitation was unsustainable. They prayed for the matter to be reconsidered in light of this notification. Revenue's Arguments: The revenue, represented by the learned counsel, did not dispute the issuance of the notification dated 05.07.2022 or its applicability to the facts of the instant case.