Arvind Kumar Agarwal Vs State of Uttar Pradesh (Allahabad High Court)
The writ petition challenged deficiency memos dated 18.01.2022 issued under Rule 90(3) of the CGST/UPGST Rules, whereby refund applications filed by the petitioner for the financial years 2018–2019 and 2019–2020 were rejected. The petitioner sought quashing of these memos and a direction to reconsider the refund applications with condonation of delay, relying on the Supreme Court’s orders extending limitation due to the COVID-19 pandemic.
The rejection by the respondent authority was based on the ground that the limitation period prescribed under Section 54(1) of the CGST/UPGST Act had expired, and the refund applications were filed belatedly on 18.01.2022. The petitioner argued that the Supreme Court, through its order dated 10.01.2022 in Suo Motu Writ Petition (C) No. 3 of 2020, had directed exclusion of the period from 15.03.2020 to 28.02.2022 for computing limitation in all judicial and quasi-judicial proceedings. It was contended that ignoring this binding direction rendered the rejection arbitrary.
The State’s counsel did not dispute the applicability of the exclusion period as directed by the Supreme Court. Upon consideration, the High Court examined the Supreme Court’s directions, which explicitly excluded the said period from limitation computation and provided that, in cases where limitation expired during that period, a fresh limitation of 90 days from 01.03.2022 would be available, or a longer remaining period if applicable.
Applying these directions to the facts, the High Court found that the petitioner’s refund applications could not have been rejected solely on the ground of delay without considering the exclusion period mandated by the Supreme Court. Consequently, the Court held that the impugned orders were unsustainable.
The High Court quashed the deficiency memos and remitted the matter back to the competent authority for reconsideration of the refund applications in accordance with law. It directed that a fresh, reasoned, and speaking order be passed after providing an opportunity of hearing to the petitioner. The Court further directed that the exercise be completed expeditiously, preferably within six weeks from the date of submission of the order.
Accordingly, the writ petition was disposed of with these observations and directions.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. Heard Sri Saurabh Paul Mishra, learned counsel for the petitioner and learned Standing Counsel for the State-respondents.
2. This writ petition has been filed praying for the following reliefs:-
“a. Issue a writ, order or direction in the nature of Certiorari to quash the Impugned Deficiency Memos dated 18.01.2022 bearing no. ZD090122022770U and ZD0901220227761 issued by Respondent No. 3 to the Petitioners in Form GST-RFD-03 under Rule 90(3) of the CGST/UPGST Rules (Annexure-P1);
b. Issue a writ, order or direction in the nature of Mandamus directing the Respondent No. 3 to reconsider the two refund applications dated 15.01.2022 filed in Form GST-RFD-01 (Annexure-P10) by the Petitioners and condone the delay in their submission as per the mandate of Hon’ble Supreme Court in In Re: Cognizance for Extension of Limitation, Suo Motu Writ Petition (C) No. 03 of 2020, and pass a fresh and reasoned order after according an opportunity of hearing to the Petitioners;”
3. Petitioner filed refund applications for tax period from Financial Year 2018-2019 and 2019-2020, which have been rejected by the impugned order, passed by the respondent no.3.
4. As per impugned order, the period of limitation for filing refund application in terms of Section 54(1) of the CGST/UPGST Act, had expired and thereafter, petitioner filed refund application on 18.01.2022, which has been rejected by the impugned order on the ground of delay.
5. Learned counsel for the petitioner submitted that the period between 15.03.2020 to 28.02.2022 has been directed by the Supreme Court to be excluded for the purposes of limitation as may be prescribed under any general or special laws in respect of all judicial or quasi-judicial proceedings, vide impugned order dated 10.01.2022 in Misc. Application No. 21 of 2022, Suo-Moto Writ Petition (C) No.3 of 2020. He, therefore, submits that refund application has been arbitrarily rejected by the respondent no.4.
6. Learned Standing Counsel could not dispute the exclusion period from 15.03.2020 to 28.02.2022 as provided by the Hon’ble Supreme Court for the purposes of limitation.
7. We have carefully considered the submissions of the learned counsel for the parties.
8. Hon’ble Supreme Court vide its order dated 10.01.2022 directed as under:-
“Taking into consideration the arguments advanced by learned counsel and the impact of the surge of the virus on public health and adversities faced by litigants in the prevailing conditions, we deem it appropriate to disposed of the M.A. No. 21 of 2022 with the following directions:
I. The order dated 23.03.2020 is restored and in continuation of the subsequent orders dated 08.03.2021, 27.04.2021 and 23.09.2021, it is directed that the period from 15.03.2020 till 28.02.2022 shall stand excluded for the purposes of limitation as may be prescribed under any general or special laws in respect of all judicial or quasi-judicial proceedings.
II. Consequently, the balance period of limitation remaining as on 03.10.2021, if any, shall become available with effect from 01.03.2022.
III. In cases where the limitation would have expired during the period between 15.03.2020 till 28.02.2022, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 01.03.2022. In the event the actual balance period of limitation remaining, with effect from 01.03.2022 is greater than 90 days, that longer period shall apply.
IV. It is further clarified that the period from 15.03.2020 till 28.02.2022 shall also stand excluded in computing the periods prescribed under sections 23(4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act 1881 and any other laws, which prescribe period (s) of limitation for instituting proceeding, outer limits (within which the court or tribunal can condone delay) and termination of proceedings
V. The aforequoted order has been passed by Hon’ble Supreme Court due to the prevailing situation on account of the Covid pandemic.
9. On the fact of the present case, we find that the refund application of the petitioner could not have been rejected by the respondent no. 3 merely on the ground of delay, ignoring the aforequoted order of Hon’ble Supreme Court.
10. Under the circumstances, the impugned order cannot be sustained and is hereby quashed. Matter is remitted back to the respondent no. 3 to decide the refund application of the petitioner in accordance with law, by reasoned and speaking order, expeditiously and preferably within six weeks from the date of presentation of copy of the order, after affording reasonable opportunity of hearing to the petitioner.
11. Subject to the observations made above, the writ petition is disposed of.
