Refund of GST paid erroneously cannot be denied solely on ground of limitation

By POONAM GANDHI Goods and Services Tax Judiciary , Trending February 20, 2026

TaxGuru Citation: 2026 taxguru.in 2471
Case Name: Rajendra Narayan Mohanty Vs Joint Commissioner of State Tax (Orissa High Court)
Appeal Number: Only available for paid members
Date of Judgement/Order: Only available for paid members
Courts: All High Courts, Orissa High Court

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Rajendra Narayan Mohanty Vs Joint Commissioner of State Tax (Orissa High Court)

Orissa High Court held that refund claimed in respect of tax paid erroneously or under mistaken notion cannot be denied solely on the ground of limitation stipulated in section 54 of the GST Act. Accordingly, refund of taxes deposited twice is allowed and order rejection refund is quashed.

Facts- Questioning the propriety, legality and validity of rejection of application for refund vide Order dated 22^ndOctober, 2025 passed in Form GST RFD-06 by the Joint Commissioner of State Tax, CT 86 GST Circle, Cuttack I East Circle, Cuttack pertaining the tax periods from 1st April, 2019 to 31st March, 2020, wherein the claim for refund of excess/extra deposit(s) amounting to Rs.6,01,645/- under the Central Goods and Services Tax Act, 2017 and Rs.6,01,645/-under the Odisha Goods and Services Tax Act, 2017 made by utilising Cash Ledger vide Form GST DRC-03 dated 18th September, 2022 on the ground of limitation stipulated in Section 54 read with Clause (h) of Paragraph (2) of Explanation appended thereto has been rejected, the petitioner has approached this Court craving to invoke extraordinary jurisdiction under Article 226/227 of the Constitution of India.

Conclusion- It is demonstrably manifest that retaining the amount paid in excess of tax liability by the State is hit by inhibition enshrined in Article 265 of the Constitution of India. The finding of Joint Commissioner of State Tax, CT86GST Circle, Cuttack-I East, Cuttack in his Order dated 22^nd October, 2025 unequivocally accepted that the petitioner has made an excess payment of tax to the tune of Rs.12,03,290/-(CGST of Rs.6,01,645/- + OGST of Rs.6,01,645/-) as the deposits were made once by way of utilising Credit Ledger and thereafter under mistaken notion by using Cash Ledger. However, discharge of tax liability having been accepted in the proceeding u/s. 74 of the GST Act vide Order dated 08.11.2024, there is no warrant for the authority concerned to retain the amounts found to have been deposited twice and reject the application for refund claimed by the petitioner.