Timely refund claims under SEZ exemption rules cannot be rejected as time-barred when filed within the prescribed quarter

A refund claim by an SEZ unit under Notification No. 12/2013-ST was held to be within the prescribed one-year period for the relevant quarter, so rejection as time-barred was unsustainable. The record also showed that the claim for July 2016 to September 2016 was filed within time, and the notification allowed one claim per quarter. Rejection was further criticised because it was issued without a speaking order and in breach of natural justice. The operative effect is that a timely quarterly refund claim cannot be denied on limitation, and an unreasoned order passed without fair opportunity cannot stand.

---

---

Issues: Whether the refund claim filed by an SEZ unit under Notification No. 12/2013-ST was barred by limitation.

Analysis: The refund was rejected as time-barred, but the record included a report of the Range Officer stating that the claim dated 14.06.2017 was within the one-year time-limit for the quarter July 2016 to September 2016. The notification permits one claim for every quarter, and the claim under dispute was filed within the prescribed period. The earlier rejection was also found to have been passed without a speaking order and in violation of natural justice.

Conclusion: The refund claim was not time-barred and the rejection on limitation was unsustainable.

Ratio Decidendi: Where the claim is filed within the period prescribed by the refund notification, rejection on limitation is unjustified, and an order passed without reasons and without fair opportunity cannot be sustained.

---