Case Law Details
Triveni Electrodes Vs Union of India (Rajasthan High Court at Jaipur)
Rajasthan HC directs GST Authorities to decide on petitioner’s time barred GST refund claim
The Hon’ble Rajasthan High Court in M/S Triveny Electrodes & ors. v. Union of India, Through Secretary, Finance Department, Government of India, New Delhi & ors. [D.B. Civil Writ Petition No. 2137/2022 dated January 20, 2022] upheld the provisions w.r.t claiming of refund of unutilized Input Tax Credit (ITC) and asked the department to pass final order after taking into account the reply of the assessee.
Facts:
M/S Triveny Electrodes & ors. (“the Petitioner”) had challenged the vires of Section 54 of the Central Goods and Services Tax Act, 2017 (“the CGST Act”) as ultra vires to the constitution. The petitioner had claimed refund of the accumulated credit in the ledger account. The Union of India, Through Secretary, Finance Department, Government of India, New Delhi & ors. (“the Assessing Officer” or “Competent Authority”) communicated the Petitioner and rejected the claim stating that it is time barred.
The competent authority however before passing such order issued a show cause notice to the Petitioner which was to be replied within 15 days. Following which the Petitioner also filed a reply raising concern that refund was not claimed after the expiry of the limitation period and the final order is pending.
Subsequently, the Petitioner also filed the present writ and contended that the relaxations related to COVID would apply to the provisions related to time limit contained in the statutes for refund.
Issue:
Whether Section 54 of the CGST Act is ultra vires the Constitution of India?
Held:
The Hon’ble Rajasthan High Court in D.B. Civil Writ Petition No. 2137/2022 dated January 20, 2022] held as under:
- Noted that in the case of Union of India and others v. VKC Footsteps India Pvt. Ltd. [Civil Appeal No 4810 of 2021 dated September 13, 2021] the Hon’ble Supreme Court has upheld the vires of the statutory provisions Section 54 of the CGST Act.
- Refused to go into the questing in the petition and stated that the Assistant Commissioner must conclude the Petitioner’s refund claim keeping in mind the reply filed by the Petitioner against the show cause notice.
- Further, stated that the Petitioner has the right to file reply raising additional grounds in support of the refund claims within a week from the date of this order.
Relevant Provision:
Section 54 of the CGST Act
“54. Refund of tax
(1) Any person claiming refund of any tax and interest, if any, paid on such tax or any other amount paid by him, may make an application before the expiry of two years from the relevant date in such form and manner as may be prescribed:
Provided that a registered person, claiming refund of any balance in the electronic cash ledger in accordance with the provisions of sub-section (6) of section 49, may claim such refund in the return furnished under section 39 in such manner as may be prescribed.
Explanation.-For the purposes of this section,––
(2) “relevant date” means-
(a) in the case of goods exported out of India where a refund of tax paid is available in respect of goods themselves or, as the case may be, the inputs or input services used in such goods,––
(i) if the goods are exported by sea or air, the date on which the ship or the aircraft in which such goods are loaded, leaves India; or
(ii) if the goods are exported by land, the date on which such goods pass the frontier; or
(iii) if the goods are exported by post, the date of despatch of goods by the Post Office concerned to a place outside India;
(b) in the case of supply of goods regarded as deemed exports where a refund of tax paid is available in respect of the goods, the date on which the return relating to such deemed exports is furnished;
(c) in the case of services exported out of India where a refund of tax paid is available in respect of services themselves or, as the case may be, the inputs or input services used in such services, the date of––
(i) receipt of payment in convertible foreign exchange 2[or in Indian rupees wherever permitted by the Reserve Bank of India], where the supply of services had been completed prior to the receipt of such payment; or
(ii) issue of invoice, where payment for the services had been received in advance prior to the date of issue of the invoice;
(d) in case where the tax becomes refundable as a consequence of judgment, decree, order or direction of the Appellate Authority, Appellate Tribunal or any court, the date of communication of such judgment, decree, order or direction;
(e) in the case of refund of unutilised input tax credit under clause (ii) of the first proviso to sub-section (3), the due date for furnishing of return under section 39 for the period in which such claim for refund arises;
(f) in the case where tax is paid provisionally under this Act or the rules made thereunder, the date of adjustment of tax after the final assessment thereof;
(g) in the case of a person, other than the supplier, the date of receipt of goods or services or both by such person; and
(h) in any other case, the date of payment of tax.”
FULL TEXT OF THE JUDGMENT/ORDER OF RAJASTHAN HIGH COURT
Since the facts are similar in both these petitions, we may notice from Writ Petition No. 2137/2021.
The petitioner has challenged the vires of Section 54 of the Central Goods and Services Tax Act, 2017 and Rajasthan Goods and Services Tax Act, 2017 as ultra vires to the Constitution. The petitioner has also prayed for a direction to set-aside a deficiency memo dated 04.12.2020 as annexure-A/3 to the writ petition.
The petitioner had claimed for refund of the accumulated credit in the ledger account. The competent authority on such claim issued the impugned communication dated 19.12.2020. One of the grounds proposed for rejecting the refund claim was that the same was time barred. The said authority however before passing final order issued this show cause notice and permitted the petitioner to file reply within 15 days. Accordingly, the petitioner has also filed the reply raising a contention that his refund claim is not subjected to the limitation period. Admittedly the assistant commissioner has not yet passed final order on the petitioner’s refund claim.
At this stage, we may note one development, namely, that the Supreme Court in the Union of India and others Vs. VKC Footsteps India Pvt. Ltd., 2021 SCC Online SC 706 has upheld the vires of the statutory provisions under consideration.
That being the situation, the petitioner’s challenge to the statutory provisions must come to an end. However at this stage, learned counsel for the petitioner argued that the COVID related extensions would apply to time limit provisions contained in the statutes for refund also. At the stage, there is neither pleading nor corresponding prayer for declaration to this effect. We therefore refuse to go into this question in the present petition.
In view of the facts and material on record, let the assistant commissioner decide the petitioner’s refund claim bearing in mind the reply of the petitioner, copy of which is produced as annexure A/4. It would be open for the petitioner to raise additional grounds in support of the refund claim by filing reply within one week from today. If any such further reply is filed, the authority shall take into consideration the same also while taking final decision.
With these observations and directions, both the petitions are disposed of.
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Author Bio
Sir,
What are your observation on limitation period u/s 54(1), GST Act.
CA Om Prakash Jain s/o J.K.Jain, Jaipur
Tel:9414300730