Narayanan Manikantan & Co. Vs State Tax Officer (Kerala High Court)
Kerala HC Directs Refund Reconsideration Where Flood Cess Was Mistakenly Paid Through GSTR-3B; 5. Two-Year GST Refund Period Runs From Correct Kerala Flood Cess Payment: Kerala High Court
Summary: Kerala High Court allowed the writ petition of Narayanan Manikantan & Co., a registered taxpayer under the CGST/KGST Act, challenging rejection of its refund application relating to Kerala Flood Cess. The petitioner had paid Kerala Flood Cess for August 2019 to May 2020 along with Form GSTR-3B instead of making payment through the prescribed Form KFC-A. After proceedings were initiated for non-payment of the cess, the petitioner remitted the amount in the correct manner on 27.06.2025 and subsequently applied for refund on 30.07.2025 of the amount earlier paid through GSTR-3B. The authority rejected the refund as being beyond the two-year limitation under Section 54 of the CGST Act. Relying upon Pushpagiri Medical Society v. State of Kerala, the High Court held that where Kerala Flood Cess was mistakenly paid along with GSTR-3B, the relevant date for refund limitation is the date on which the cess was subsequently paid into the correct account.
Since the correct payment was made on 27.06.2025 and the refund application was filed on 30.07.2025, it was within the prescribed period. The Court therefore quashed the rejection order and directed the competent authority to reconsider the refund application as having been filed in time, pass appropriate orders within one month, and effect the refund immediately upon sanction.
Cases Discussed
- Pushpagiri Medical Society v. State of Kerala and Others (Kerala High Court), W.P.(C) No.40664/2025 — followed for the principle that where Kerala Flood Cess was mistakenly paid along with Form GSTR-3B and was subsequently paid into the correct account, the two-year period under Section 54 is to be reckoned from the date of payment into the correct account.
FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT
This writ petition is submitted by the petitioner, a registered taxpayer under the provisions of the CGST/KGST Act, 2017, being aggrieved by the rejection of refund application submitted by the petitioner. Ext.P4 is the application dated 30.07.2025 submitted by the petitioner seeking refund under Section 54 GST Act. Ext.P5 is the order passed by the authority concerned.
2. The facts that led to the filing of this writ petition are as follows: The State Government introduced Kerala Flood Cess as per the Finance Act, 2019, which was notified with effect from June, 2019. The said cess was introduced to overcome the crisis caused in the flood that occurred in State of Kerala in the year 2018. After introduction of the same, there was some confusion with respect to the mode through which, the payment has to be made towards Kerala Flood Cess.
3. Consequently, the petitioner paid the amount towards Kerala Flood Cess for the period from August, 2019 to May 2020 along with the return in Form GSTR 3B, whereas the requirement was to the effect the payment of the same, through Form KFC-A. Therefore, the petitioner was proceeded against for non-payment of the Kerala Flood Cess and upon the realizing the same, the petitioner remitted the amount on 27.06.2025 as evidenced by Ext.P3. Thereafter, the petitioner submitted Ext.P4 application seeking refund of the amount, which was rejected as per Ext.P5 order. The reason stated in Ext.P5 was that, the application was submitted beyond the statutory period of two years from the relevant date as contemplated under Section 54 of the CGST Act. This writ petition is submitted by the petitioner in such circumstances.
4. I have heard the learned Counsel for the petitioner, thest learned Government Pleader for the 1 respondent, the learnednd Standing Counsel for the 2 respondent and the learned CGC for therd 3 respondent.
5 .As far as the issue involved in this writ petition is concerned, this Court has already decided the same, in W.P(C) No.40664/2025 (Pushpagiri Medical Society v. State of Kerala and Others), where, this Court came to a definite conclusion that, in respect of the application to be submitted seeking refund of the amount mistakenly paid along with Form GSTR 3B towards Kerala Flood Cess, the relevant date could be the date on which the petitioner had paid the amounts towards the Kerala Flood Cess in the correct account. Thus, it was clearly held by this Court in the aforesaid judgment that, the period of two years as envisaged in Section 54 has to be reckoned from the date on which the petitioner had remitted the Kerala Flood Cess and not from the payment effected along with Form GSTR 3B.
In this case, it is evident from Ext.P6 that, the petitioner had remitted the amount towards Kerala Flood Cess on 27.06.2026 and in the light of the principles laid down in Pushpagiri Medical Society’s case (supra) the period of two years starts from 27.06.2025 onwards. It is evident from Ext.P4 that the petitioner had submitted the application on 30.07.2025 and therefore, the same is within the period specified under Section 54 of the CGST Act. Therefore, I am of the view that, the petitioner is entitled to succeed.
Accordingly, this writ petition is disposed of quashing Ext.P5, with a direction to the competent authority to reconsider Ext.P4 application, by treating it as an application submitted in time. Appropriate orders thereon shall be passed in the light of the observations made in this judgment, within a period of one month from the date of receipt of a copy of this judgment and the refund shall be affected immediately upon sanctioning the same.
