Narayanan Manikandan Traders Private Limited Vs Assistant Commissioner (Kerala High Court)
Summary: The Kerala High Court quashed the rejection of a refund application filed by Narayanan Manikandan Traders Private Limited concerning Kerala Flood Cess mistakenly paid along with GST returns. The petitioner, a registered taxpayer under the CGST/KGST Act, 2017, had paid the cess for August 2019 to May 2020 along with Form GSTR 3B, although payment was required through Form KFC-A. After recognising the mistake, the petitioner remitted the cess separately and submitted a refund application dated 30.07.2025. The authority rejected the application on the ground that it exceeded the two-year limitation under Section 54 of the CGST Act. Following Pushpagiri Medical Society v. State of Kerala and Others, W.P.(C) No.40664/2025, the Court held that the relevant date for seeking refund of the amount mistakenly paid through GSTR 3B was the date of subsequent payment of the cess into the correct account. The limitation period therefore had to be calculated from that payment rather than the earlier erroneous remittance. On the facts recorded in the supplied judgment, the Court found the application timely. It quashed Ext.P4 and directed the competent authority to reconsider Ext.P3 as an application submitted within time. Appropriate orders must be passed within one month from receipt of a copy of the judgment, with the refund to be effected immediately upon sanction.
Cases Discussed
- Pushpagiri Medical Society v. State of Kerala and Others — W.P.(C) No.40664/2025 (Kerala High Court): Followed for the principle that the two-year refund limitation under Section 54, where Kerala Flood Cess was mistakenly paid along with Form GSTR 3B, runs from the subsequent payment of the cess into the correct account.
FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT
This writ petition is submitted by the petitioner, a registered taxpayer under the provisions of the CGST/KGST Act, 2017 being aggrieved by the rejection of refund application submitted by the petitioner. Ext.P3 is the application dated 30.07.2025 submitted by the petitioner seeking refund under Section 54 GST Act. Ext.P4 is the order passed by the authority concerned.
2.The facts that led to the filing of this writ petition are as follows: The State Government introduced Kerala Flood Cess as per the Finance Act, 2019, which was notified with effect from June, 2019. The said cess was introduced to overcome the crisis caused in the flood that occurred in State of Kerala in the year 2018. After introduction of the same, there was some confusion with respect to the mode through which the said payment has to be made towards Kerala Flood Cess.
3. Consequently, the petitioner paid the amount towards Kerala Flood Cess for the period from August, 2019 to May 2020 along with the return in Form GSTR 3B, whereas, the requirement was to the effect the payment of the same through Form KFC-A. Upon the realizing the mistake, the petitioner remitted the amount on as evidenced by Ext P2. Thereafter, the petitioner submitted Ext.P3 application seeking refund of the amount, which was rejected as per Ext.P4 order. The reason stated in Ext.P4 was that, the application was submitted beyond the statutory period of two years from the relevant date as contemplated under Section 54 of the CGST Act. This writ petition is submitted by the petitioner in such circumstances.
4. I have heard the learned Counsel for the petitioner, the learned Standing Counsel for the 1st respondent, the learned Government Pleader for the 2 respondent and the learned CGC for the 3rd respondent.
5. As far as the issue involved in this writ petition is concerned, this Court has already decided the same, in W.P(C) No.40664/2025 (Pushpagiri Medical Society v. State of Kerala and Others), where, this Court came to a definite conclusion that, in respect of the application to be submitted seeking refund of the amount mistakenly paid along with Form GSTR 3B towards Kerala Flood Cess, the relevant date could be the date on which the petitioner had paid the amounts towards the Kerala Flood Cess in the correct account. Thus, it was clearly held by this Court in the aforesaid judgment that, the period of two years as envisaged in Section 54 has to be reckoned from the date on which the petitioner had remitted the Kerala Flood Cess and not from the payment effected along with Form GSTR 3B. In this case, it is evident from Ext.P2 that the petitioner had remitted the amount towards Kerala Flood Cess before 2.07.2025 and in the light of the principles laid down in Pushpagiri Medical Society’s case the period of two years starts from the date of payment. It is evident from Ext.P3 that the petitioner had submitted the application on 30.07.2025 and therefore, the same is within the period specified under Section 54 of the CGST Act. Therefore, I am of the view that, the petitioner is entitled to succeed. Accordingly, this writ petition is disposed of quashing Ext.P4 with a direction to the competent authority to reconsider Ext.P3 application by treating it as an application submitted in time. Appropriate orders thereon shall be passed, within a period of one month from the date of receipt of a copy of the judgment and the refund shall be affected immediately upon sanctioning the same.
