M/S Interproductec Virtual Labs PVT. LTD. vs. The Union Of INDIA Thr The Ministry Of Law And Justice And Ors

Facts

The petitioner, M/s. Interproductee Virtual Labs Pvt. Ltd., filed a writ petition challenging the rejection of its refund application. The petitioner initially filed a refund application on September 30, 2020, which was refiled twice due to deficiencies. The last refiled application was submitted on October 14, 2020. Respondent No. 3 rejected this application as time-barred, and an appeal against this order was also dismissed by the Appellate Authority on April 30, 2021. The petitioner contended that the rejection was based on limitation, and relied on Supreme Court orders regarding the extension of limitation. The respondents argued that the third refund application was filed after the two-year period prescribed by a circular dated November 18, 2019, and Section 54(1) of the CGST Act.

Held

The Court held that the period of limitation between March 15, 2020, and October 2, 2021, should be excluded in computing the time for filing the refund application, in view of the Supreme Court's orders. The Court found that the petitioner's third refund application, filed on October 14, 2020, fell within this extended period. Therefore, the application was within the prescribed period of limitation. The Court reasoned that the Supreme Court's orders and the Bombay High Court's judgment in Saiher Supply Chain Consulting Pvt. Ltd. were binding and directly applicable to the facts of the case. The respondents could not distinguish these precedents. Consequently, the order dated April 30, 2021, was quashed and set aside. The third refund application was restored to the file of Respondent No. 3 for consideration on its merits. The Court explicitly stated that it did not decide on the validity of Rule 90(3) of the CGST Rules, 2017, or the circular dated November 18, 2019.

Key Issues

1. Whether the third refund application filed by the petitioner on October 14, 2020, was time-barred, considering the Supreme Court's orders on the extension of limitation, and if so, whether Section 54(1) of the Central Goods and Services Tax Act, 2017, and the circular dated November 18, 2019, were correctly applied. Petitioner's arguments: The petitioner argued that the rejection of its refund application was solely on the ground of limitation. It relied on the Supreme Court's orders in Suo Motu Writ Petition (C) No.(S).3/2020 and Misc. Application No.665 of 2021, which extended the period of limitation. The petitioner also cited a Bombay High Court judgment in Saiher Supply Chain Consulting Pvt. Ltd. vs. Union of India, asserting that the facts were identical. Respondents' arguments: The respondents contended that the earlier refund applications had deficiencies. They argued that the third refund application was required to be filed within two years as per the circular dated November 18, 2019, and Section 54(1) of the CGST Act, and that the application was filed after this period expired.