Introduction: The Delhi High Court has provided significant relief to petitioners seeking refunds for Goods and Services Tax (GST). The court ruled that the period from March 1, 2020, to February 28, 2022, should be excluded from the limitation period for GST refund applications.
Analysis: This judgment came after the petitioner’s application for a refund was rejected by the Adjudicating Authority on the grounds of being time-barred. The rejection was sustained even after an appeal. The petitioner claimed technical glitches had prevented the timely filing of the refund claim. Given the exceptional circumstances surrounding the Covid-19 pandemic, the court deemed it necessary to exclude the said period while calculating the limitation period.
Following a notification from the Central Board of Indirect Taxes and Customs (CBIC) in July 2022, the court decided to consider this period exclusion valid, thus overturning the earlier decision of the Adjudicating Authority.
Conclusion: This ruling provides much-needed relief for businesses affected by the Covid-19 pandemic, as they now have an extended window to claim their GST refunds. The decision also underlines the flexibility of the judicial system in adjusting to exceptional circumstances and underscores the importance of ensuring that businesses can recover their due amounts even amidst challenging times.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. The petitioner has filed the present petition, inter alia, impugning the order dated 26.05.2021, passed by the Adjudicating Authority [Assistant Commissioner of Central Goods & Services Tax], rejecting the petitioner’s claim for refund. The petitioner also impugns the order dated 25.02.2022, passed by the Appellate Authority [Commissioner of Central Goods and Service Tax/GST(Appeals-1)], whereby the petitioner’s claim for refund of Input Tax Credit (ITC) pertaining to the goods supplied to SEZ Units (zero-rated supply) effected during the period of August 2017 to March 2018 was denied. The petitioner claims that during the said period, it had supplied goods for a value of ₹2,52,2 and Services Tax (IGST).
2. The petitioner claims that it attempted to file its claim for the refund repeatedly during the period of 14.08.2020 to 02.04.2021, but was unable to do so on account of technical glitches. The petitioner’s application for refund in the prescribed Form (RFD-01) was finally uploaded on 02.04.2021. The said application was acknowledged by the Adjudicating Authority, however, the same was not processed. On 13.05.2021, the Adjudicating Authority issued a show cause notice, proposing to reject the petitioner’s application on the ground that it was time-barred. The petitioner’s request for condonation ay on account of mitigating circumstances resulting from the outbreak of Covid 19 was not accepted.
3. By the impugned order dated 05.2021, the Adjudicating Authority rejected the petitioner’s application for refund of an amount of ₹ beyond the period of the Central Goods and Services Tax Act, 2017 (hereafter ‘the CGST Act’).
4. As stated above, the petitioner’s appeal against the said decision was also rejected by the Appellate Authority.
5. On 05.07.2022, the Central Board of Indirect Taxes and Customs (CBIC) issued a circular, being Notification No. 13/2022- Central Tax, whereby the period of 01.03.2020 to 28.02.2022 was to be excluded for calculating the period of limitation for filing an application under Sections 54 and 55 of the CGST Act.
6. It is stated that in the present case, the zero-rated supplies are stated to have been made between August 2017 to March 2018. According to the petitioner, the refund in respect of the supplies made during the period of February 2018 to March 2018, is within the period of limitation; if the period after 01.03 .2020 to 28.02.2022, is excluded.
7. The learned counsel also submits that as far as the refund for the supplies made during August 2017 to January 2018 is concerned, the question whether the same is barred by limitation, is required to be considered with reference to a due date for filing the returns for the said period.
8. It is apparent that neither the Adjudicating Authority nor the Appellate Authority has considered the petitioners claim that the delay is required to be condoned. In the circumstances, we consider it apposite to set aside the orders dated 205.2021 and 25.02.2022 impugned in this petition, and remand the matter to the Adjudicating Authority for considering afresh, in light of the notification dated 05.07.2022. It is so directed.
9. The petition is allowed in the aforesaid