Suraj Mangar Vs Assistant Commissioner of West Bengal State Tax and Others (Calcutta High Court)
The present case concerns rejection of a refund application under Section 54 of the West Bengal Goods and Services Tax Act, 2017, and the validity of such rejection in light of statutory timelines and procedural compliance.
The appellant filed a refund application on December 24, 2021. An acknowledgment was issued on January 10, 2022, followed by a show cause notice on February 8, 2022, fixing the reply date as February 23, 2022. The refund claim was ultimately rejected, and such rejection was upheld by the Appellate Authority, leading to the present appeal.
A central issue before the court was whether the 60-day time limit prescribed under Section 54(7) for passing a refund order is mandatory. The appellant argued that statutory timelines were violated, as acknowledgment was delayed beyond 15 days and the reply date itself extended beyond the 60-day outer limit. It was contended that such non-compliance vitiates the entire proceedings.
The respondents, however, argued that the timeline is directory and not mandatory, relying on the provision for interest under Section 56 for delayed refunds. They contended that delay does not invalidate the process.
The court examined the statutory framework, including Section 54 and relevant rules. It noted that Section 54(7) uses the term “shall,” which generally indicates a mandatory requirement. Applying strict interpretation applicable to taxing statutes, the court held that the 60-day limit is mandatory. It further observed that non-adherence to statutory timelines disentitles the authority from raising deficiencies in the refund application.
