GST Refund Limitation Objection Requires Show Cause Notice: Madras HC

L. S. Pacific wood Tech Pvt ltd Vs Commercial Tax officer (Madras High Court)

Summary: The petitioner challenged a deficiency memo dated 16 April 2026 stating that its GST refund claim was time barred. It had applied for a refund under Section 54 of the applicable GST statutes.

The petitioner argued that a deficiency memo under Rule 90(3) addresses defects that an applicant can rectify by filing a fresh application. Where the officer instead considers the refund inadmissible, the procedure under Rule 92(3) requires a show cause notice and an opportunity to respond. The Court agreed that a deficiency memo cannot be issued on the ground that a refund application is time barred.

The Court disposed of the writ petition, leaving the respondent free to issue a show cause notice under Rule 92(3) if it intends to reject the claim wholly or partly. Any such notice must be issued within two weeks of receipt of the order. The Court directed that no further action be taken pursuant to the impugned deficiency memo. It closed the connected petition and made no order as to costs. The Court did not decide whether the refund claim itself was within time or direct that a refund be sanctioned.