Laldeo Rajak Vs Kaneka India Private Limited (GSTAT Delhi)
Summary: The GST Appellate Tribunal (GSTAT), Delhi State Bench, in Laldeo Rajak Vs Kaneka India Private Limited, dismissed the Revenue’s appeal challenging the maintainability of a GST refund claim of ₹39,88,388 on limitation grounds. The Division Bench comprising Shri Sanjay Kumar Aggarwal, Vice President, and Shri Rajiv Kapoor, Member (Technical), held that the original refund application filed on 29 February 2024 was within the extended limitation period prescribed under Section 54(1) of the Central Goods and Services Tax Act, 2017, read with Notification No. 13/2022-Central Tax dated 5 July 2022. The Tribunal upheld the annulment of the original rejection order but substituted its own detailed reasoning for that of the first appellate authority.
The dispute originated from an advance of ₹7,11,67,068 received by Kaneka India Private Limited in April 2020, on which GST of ₹1,28,10,072 was discharged through FORM GSTR-3B filed on 19 May 2020. Subsequently, a portion of the advance amounting to ₹4,90,09,353 was adjusted against actual supplies made in June 2020. The taxpayer consequently claimed that GST of ₹39,88,388, comprising CGST and SGST of ₹19,94,194 each, had been paid in excess and was refundable under Section 54 of the CGST Act. The original refund application was submitted on 29 February 2024, followed by fresh applications on 31 March 2024 and 25 May 2024 after the issuance of deficiency memos.
The adjudicating authority issued a show cause notice dated 1 July 2024 questioning the limitation period and the availability of supporting documents. Although the taxpayer submitted a detailed reply on 17 July 2024, the Assistant Commissioner rejected the refund claim through an Order-in-Original dated 22 July 2024, holding that the applications were time-barred. The authority referred to Notification No. 13/2022-Central Tax, which excluded the period from 1 March 2020 to 28 February 2022 for calculating limitation, but did not undertake a proper computation applying the notification. The first appellate authority subsequently annulled the rejection order on 30 April 2025, principally because the adjudicating authority had failed to consider the taxpayer’s submissions, thereby violating the principles of natural justice.
The Revenue challenged the appellate order before GSTAT under Section 112(3) of the CGST Act. Its principal contention was that the taxpayer had incorrectly calculated the extended limitation period by adding 675 days to the original deadline. According to the Department, only 650 days were available under the notification, and the original refund application filed on 29 February 2024 was therefore delayed by one day. The Revenue maintained that the statutory limitation period had to be strictly interpreted and that the first appellate authority had failed to independently examine the taxpayer’s calculation. The taxpayer opposed the appeal, arguing that the Department was introducing a new computation not specifically raised in the show cause notice or original adjudication order.
On the preliminary issue of maintainability, the Tribunal rejected the taxpayer’s objection that the Revenue’s appeal travelled beyond the show cause notice. Referring to Commissioner of Central Excise, Bangalore v. Brindavan Beverages, (2007) 5 SCC 388, and other judicial precedents, it distinguished between introducing an entirely new allegation and challenging the arithmetic underlying an existing dispute. Since limitation under Section 54 had been the central issue throughout the proceedings, the Department was entitled to question the correctness of the taxpayer’s computation before the Tribunal. The Tribunal therefore held that the departmental appeal was maintainable and proceeded to examine the substantive questions.
The Tribunal separately examined the obligation of adjudicating and appellate authorities to pass reasoned and speaking orders. Relying upon decisions including Kranti Associates (P) Ltd. v. Masood Ahmed Khan, (2010) 9 SCC 496, Siemens Engineering and Manufacturing Co. of India Ltd. v. Union of India, (1976) 2 SCC 981, and Harinagar Sugar Mills Ltd. v. Shyam Sundar Jhunjhunwala, [1962] 2 SCR 339, it observed that recording reasons is an essential safeguard against arbitrariness. The original adjudicating authority had failed to properly consider the taxpayer’s written reply, while the first appellate authority had annulled the rejection without independently deciding the limitation issue. Although the Tribunal agreed that the original order suffered from non-consideration of submissions, it found the appellate order deficient because it did not resolve the substantive controversy through a reasoned determination.
On the central question of limitation, the Tribunal examined Section 54(1) of the CGST Act together with Notification No. 13/2022-Central Tax dated 5 July 2022. It identified 19 May 2020, the date on which the taxpayer discharged GST through GSTR-3B, as the relevant date for the refund claim. Since that date fell within the period excluded by the notification, the Tribunal independently determined the applicable extended deadline. It concluded that the permissible filing period extended up to 29 February 2024, making the original refund application filed on that date timely. Consequently, the Revenue’s contention that the claim had been submitted one day beyond the statutory deadline was rejected.
The Tribunal further considered the legal consequences of the deficiency memos issued on 12 March 2024 and 10 April 2024. It held that the subsequent refund applications filed on 31 March 2024 and 25 May 2024 were continuations of the original application submitted within limitation. The issuance of deficiency memos and subsequent rectification of the application did not independently alter the date relevant for determining limitation. Accordingly, the Department could not treat the later filing dates as the starting point for rejecting an otherwise timely refund claim. This finding established that the original application date remained decisive for determining compliance with the statutory time limit in the circumstances of the case.
The taxpayer had alternatively contended that the amount claimed represented a deposit made under a mistake of law rather than tax and was therefore outside the limitation provisions of Section 54. The Tribunal rejected this contention, distinguishing decisions concerning payments made without any underlying tax liability, including KVR Construction, Parijat Construction, and other authorities relied upon by the taxpayer. It observed that GST was legally payable on the advance when received and had been discharged through the statutory return. The subsequent failure of part of the anticipated supply to materialise gave rise to a refund claim but did not retrospectively convert the original tax payment into a deposit outside the GST refund framework. The Tribunal also held that the two-year limitation period under Section 54(1) constituted a substantive statutory condition of refund eligibility rather than a mere procedural requirement capable of relaxation through administrative circulars.
In its final order dated 29 October 2026, the GSTAT dismissed the departmental appeal and upheld the annulment of the Order-in-Original dated 22 July 2024, substituting its own comprehensive reasoning for the reasons given by the first appellate authority. It expressly held that the original refund application dated 29 February 2024 had been filed within the limitation period prescribed under Section 54(1), as extended by Notification No. 13/2022-Central Tax. The Tribunal further confirmed that subsequent applications following deficiency memos related back to the original timely filing. Although it rejected the taxpayer’s broader arguments that Section 54 limitation was merely procedural or inapplicable to the amount claimed, those findings did not affect the conclusion that the refund application was within time. The Revenue’s appeal was accordingly dismissed, with no order as to costs.
Cases Discussed
- Commissioner of Customs, Mumbai v. Toyo Engineering India Ltd. — 2006 (201) E.L.T. 513 (S.C.)
- Collector of Central Excise, Ahmedabad v. Cellulose Products of India — 2000 (124) E.L.T. 1133 (CEGAT)
- Kalpana Chemicals (P) Ltd. v. Collector — 2001 (127) E.L.T. A165 (S.C.)
- T.D. Kumar & Bros. v. CIT — [1967] 63 ITR 67 (S.C.)
- Dalip Singh v. Union of India — 1987 (31) E.L.T. 352 (Del.)
- Lenovo (India) Pvt. Ltd. v. Joint Commissioner of GST (Appeals-1) — (2023) 12 Centax 230 (Mad.)
- ARS Energy Pvt. Ltd. v. Additional Commissioner (Appeals) — (2023) 13 Centax 300 (Mad.)
- Rites Ltd. v. Assistant Commissioner, CGST — W.P.(C) 13543/2023 (Del., 28.01.2025)
- Delhi Metro Rail Corporation Ltd. v. Additional Commissioner, CGST (Appeals-II) — (2023) 10 Centax 355 (Del.)
- Messrs Aalidhra Texcraft Engineers v. Union of India — 2025 (1) TMI 50 (Guj.)
- CCE (Appeals) v. KVR Construction — 2012 (26) S.T.R. 195 (Kar.)
- Parijat Construction v. Commissioner of Central Excise, Nashik — 2018 (359) E.L.T. 113 (CESTAT)
- Commissioner of C. Ex., Bangalore v. Brindavan Beverages — (2007) 5 SCC 388
- Kranti Associates (P) Ltd. v. Masood Ahmed Khan — (2010) 9 SCC 496
- Siemens Engineering and Manufacturing Co. of India Ltd. v. Union of India — (1976) 2 SCC 981
- Mafatlal Industries Ltd. v. Union of India — (1997) 5 SCC 536
