Bharat Oil Traders Th Manav Mahajan vs. Assistant Commissioner CGST Samba And Another

Held

The Court held that the amendment to Section 54 of the CGST Act, which altered the definition of 'relevant date' effective from February 1, 2019, cannot be applied retrospectively to curtail the petitioner's vested right to claim a refund for periods prior to the amendment. The Court relied on the principle that statutes are presumed to operate prospectively unless expressly made retrospective, and substantive amendments that alter or curtail vested rights are presumed prospective. The Court found that the un-amended definition of 'relevant date' would continue to apply for periods where the right to claim refund had already vested. Furthermore, the Court held that the refund claims for July 2017 to December 2018 are not barred by limitation due to the extended period afforded by Notification No. 13/2022 and the Supreme Court's orders excluding the COVID-19 period. The claim for January to March 2019 was also not barred by limitation. The Court noted that the rejection of the claim for January-March 2019 was made without a reasoned finding on ineligible inputs. Consequently, the impugned order was set aside, and the matter was remanded back to the respondent for fresh determination.

Facts

The petitioner, Bharat Oil Traders, a partnership firm engaged in refilling and sale of edible oil and ghee, claimed a refund of accumulated input tax credit under Section 54(3)(ii) of the CGST/SGST Act, 2017, due to an inverted tax structure. The refund claims pertained to periods from July 2017 to March 2019. The petitioner's refund application was filed on February 2, 2021. The respondents rejected the refund application on grounds of limitation and, for the period January 2019 to March 2019, on the alleged ground of ineligible inputs. The appellate authority also rejected the appeal without considering Notification No. 13/2022. The petitioner argued that the amended definition of 'relevant date' effective from February 1, 2019, should not apply retrospectively to curtail vested rights, and that the COVID-19 pandemic exclusion period extended the limitation.

Key Issues

1. Whether the amended definition of 'relevant date' under Section 54(1) of the CGST Act, effective from February 1, 2019, applies retrospectively to curtail the petitioner's right to claim a refund for periods prior to the amendment, thereby impacting the vested right of action? (Section 54(1) and Explanation 2(e) of CGST Act, 2017) 2. Whether the refund application filed on February 2, 2021, is within the prescribed limitation period, considering the exclusion of the period from March 1, 2020, to February 28, 2022, due to the COVID-19 pandemic as per Notification No. 13/2022 and Supreme Court orders? Petitioner's Arguments: The petitioner argued that the amended definition of 'relevant date' operates prospectively. For periods where the right to claim refund accrued before the amendment, the un-amended definition should apply. They contended that their refund claim, filed on February 2, 2021, is within the limitation period due to the exclusion of the COVID-19 period. The rejection of the claim for January-March 2019 was without a reasoned finding on ineligible inputs. Respondents' Arguments: The respondents argued that the amended definition of 'relevant date' applies to refund claims filed on or after February 1, 2019, even if the claims pertain to periods prior to the amendment. They admitted that the COVID-19 exclusion period would make refund claims for February 2018 to December 2018 not time-barred, but maintained that the claim for July 2017 to January 2018 would fall beyond the limitation period. They also asserted that the refund for January-March 2019 was rejected due to the petitioner not receiving eligible inputs.