Kanika Exports Vs Union of India (Delhi High Court)
The Delhi High Court considered two writ petitions involving rejection of GST refund applications on the ground of limitation. The central issue in both matters was the determination of the “relevant date” under Section 54 of the Central Goods and Services Tax Act, 2017 (CGST Act) for computing the two-year limitation period for refund claims relating to unutilised Input Tax Credit (ITC).
In the first petition, the petitioner, an exporter of readymade garments, made zero-rated exports without payment of tax and sought a refund of accumulated unutilised ITC for the period July 2017 to March 2018 by filing an application on 29 March 2020. The Adjudicating Authority rejected the claim as time-barred by applying Explanation 2(a) to Section 54, treating the relevant date as the date of export under the shipping bills and Export General Manifest. The Appellate Authority upheld the rejection. The petitioner argued that the claim related to refund of unutilised ITC under Section 54(3), and therefore the relevant date should be determined under the unamended Explanation 2(e), which prescribed the end of the financial year in which the refund claim arose. According to the petitioner, the limitation expired only on 31 March 2020, making the application filed on 29 March 2020 timely. The petitioner further contended that the amendment to Explanation 2(e), effective from 1 February 2019, was prospective and could not retrospectively curtail an accrued right to claim refund.
