SC restored Limitation Extension order – Its Impact on GST Refund

Hon’ble Supreme Court has restored the Limitation Extension order – Cognizance for Extension of Limitation, Suo Motu Writ (Civil) No. 3 of 2020. Final Order dated: 10-01-2022– What does it mean for Refund related issues under GST.

In order to answer the above mute question and to have a better grip and understanding on the issue let us go back on the timelines to see what had happened with reference to this issue of Cognizance for Extension of Limitation by the Apex Court. One may be aware that Due to the outbreak of the COVID-19 pandemic in March 2020, to dilute the distress of the petitioners the honorable Supreme Court of India took Suo Motu cognizance of the difficulties that might be faced by the litigants in filing petitions/ applications/ suits/ appeals/ all other proceedings within the period of limitation prescribed under the general law of limitation or under any special laws (both Central and/or State).

On 23.03.2020, the Honorable Apex Court directed extension of the period of limitation in all proceedings before the Courts/ Tribunals including this Court w.e.f. 15.03.2020 till further orders to mitigate this difficulty.

Later, when the pandemic situation subsided in the country to manageable levels and considering that the normalcy was being restored, the Hon’ble court issued an order on 08.03.2021 for ending the extension period w.e.f. 15.03.2020 stating that in cases where the limitation would have expired during the period between 15.03.2020 till 14.03.2021, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 15.03.2021 onwards along with clear guidelines for computation of the time limits.

However, unfortunately, the entire country was hit by another Covid-19 wave paralyzing every activity on every front. Taking the ill effects caused by the second wave of COVID-19, as a reasonable point, into an acquaintance the Honorable Supreme Court had in Miscellaneous Application No.665 of 2021 restored its order dated 23.03.2020 and ordered that the period(s) of limitation, as prescribed under any general or special laws in respect of all judicial or quasi-judicial proceedings, whether condonable or not, shall stand extended till further orders.

Subsequently, a request was been made before the Honorable Supreme court pleading that there is no requirement for the continuance of the initial order passed by this Court on 23.03.2020 and relaxation of the period of limitation need not be continued any further as the purpose of which is not there anymore. In light of this request, Hon’ble SC has disposed of the M.A. No.665 of 2021 fixing the extension of the period of limitation from 15.03.2020 till 02.10.2021

Now again, as a turn of events, regrettably, as India is witnessing a sharp rise in the Covid-19 cases especially during January 2022, the Hon’ble Supreme Court decided to restore the limitation extension period up to 28^th February 2022.  Accordingly, as per the order of the Apex Court dated 10 January 2022, the period from 15 March 2020 to 28 February 2022 would stand excluded for the purpose of limitation.  The Apex Court in MISCELLANEOUS APPLICATION NO. 21 OF 2022 of SUO MOTU WRIT PETITION (C) NO. 3 OF 2020 pronounced the following order.

(a) The order dated 23.03.2020 is restored and in continuation of the subsequent orders dated 08.03.2021, 27.04.2021, and 23.09.2021, it is directed that the period from 03.2020 till 28.02.2022 shall stand excluded for the purposes of limitation as may be prescribed under any general or special laws in respect of all judicial or quasi-judicial proceedings.

 (b) Consequently, the balance period of limitation remaining as of 03.10.2021, if any, shall become available with effect from 01.03.2022.

 (c) In cases where the limitation would have expired during the period between 15.03.2020 till 28.02.2022, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 01.03.2022.

 (d) In the event the actual balance period of limitation remaining, with effect from 01.03.2022 is greater than 90 days, the longer period shall apply.

The order dated 10 January 2022 is in recognition of the difficulties faced by the Courts as well as the litigants on account of the surge witnessed in Covid-19 cases.

Now coming to our primary question of whether the Limitation Extension order is applicable to Refund related issues or not?

Well, if one can recollect in the context of GST Laws, in the CBIC’s Circular 157/13/2021 – GST dated 20 July 2021, (Para 5) it has been clearly stated that

This limitation of time is applicable only for the extension of timelines granted by Hon’ble Supreme Court in respect of any appeal which is required to be filed before Joint/ Additional Commissioner (Appeals), Commissioner (Appeals), Appellate Authority for Advance Ruling, Tribunal, and various courts against any quasi-judicial order or where proceeding for revision or rectification of any order is required to be undertaken and is not applicable to any other proceedings under GST Laws. This implies importantly that the Applications for Refunds under Section 54 of the CGST Act 2017 are not covered by this Limitation Extension Order.

Be it as the case may be in a reasoned order,

The Hon’ble Bombay High Court in case of Saiher Supply Chain Company  v UOI WRIT PETITION (L.) NO. 1275 OF 2021 dated:12-01-2022, has held that the Covid limitation suspension orders of Supreme Court apply to limitation for refund application under Section 54 of GST Act 2017 also to the extent of its benefits if they are otherwise eligible.

In the above order, the Honorable Bombay High Court has towed on the same lines where the Honorable Madras High Court on a similar issue in the case of GNC Infra LLP Vs Assistant Commissioner (GNC Infra LLP v. Assistant Commissioner [W.P.No.18165 & 18168 of 2021 and WMP. Nos. 19386 & 19389 of 2021, dated September 28, 2021] deemed that the limitation of extension of time as held by Honorable Supreme Court is applicable for refunds related issues under Section 54 of the CGST Act 2017 also and remanded the case back with a direction to the Respondent to examine the refund applications on de novo basis and make orders afresh inter alia in accordance with Section 54 of CGST Act and Rule 92 of the CGST Rules 2017and in line with the order of the Hon’ble Supreme Court of India in reference to  Cognizance for extension of a limitation considering the challenges faced by the litigants on account of COVID 19.

A new dimension added (or may be put to rest) to Refund related disputes especially on the question of Time limits from the relevant date.

Jai Hind !