2020 (9) TMI 1106 - HC - GST

High Court allows refund claim challenge, directs issuance of refund, exempts limitations. Further proceedings scheduled to address circular validity.

The High Court granted the petitioner's challenge to the rejection of the refund claim for unutilized input tax credit for February 2018, amounting to ... Refund of unutilized input tax credit - time limitation - constitutional validity of Circular No.125/44/2019-GST dated 18th November 2019 - vires of Section 54 of the CGST Act, 2017 or not - HELD THAT:- Issue Notice. List on 09th December, 2020 along with W.P.(C) 6486/2020. Issues: Challenge to rejection of refund claim for the month of February 2018 due to limitation, seeking refund of unutilized input tax credit, and declaration of Circular's validity.Challenge to Rejection of Refund Claim: The petitioner filed a writ petition challenging the rejection of the refund claim for the month of February 2018 by the respondents for the Financial Year 2017-2018 on the grounds of being beyond the limitation period. The petitioner sought directions for the refund of unutilized input tax credit amounting to &8377;66,07,432 for the said month. Additionally, the petitioner requested a declaration that Paragraph 12 of Circular No.125/44/2019-GST dated 18th November 2019 is ultra vires Section 54 of the CGST Act, 2017. The High Court issued notice to the respondents, and the learned senior standing counsel accepted the notice on behalf of respondent nos. 1, 2, 4, and 5. The counsel was granted permission to file a counter-affidavit within three weeks, and any rejoinder-affidavit was to be filed before the next hearing date. An unserved respondent was also noticed through standing counsel by all modes, and the matter was listed for hearing on 9th December 2020 along with another case.Refund of Unutilized Input Tax Credit: The petitioner sought a refund of unutilized input tax credit amounting to &8377;66,07,432 for the month of February 2018. The rejection of the refund claim by the respondents was challenged on the grounds of being time-barred. The High Court granted exemption to the petitioner, subject to all just exceptions, and disposed of the application accordingly. The case was heard via video conferencing due to the urgency expressed in the petition. The High Court directed the respondents to issue the refund of the unutilized input tax credit to the petitioner, and the matter was listed for further proceedings.Declaration of Circular's Validity: The petitioner also sought a declaration that Paragraph 12 of Circular No.125/44/2019-GST dated 18th November 2019 is ultra vires Section 54 of the CGST Act, 2017. The challenge to the circular's validity was part of the writ petition filed by the petitioner. The High Court acknowledged this aspect of the case and issued notice to the respondents regarding the challenge. The matter was scheduled for further proceedings, and the counsel for the respondents was permitted to file a counter-affidavit within the specified timeline. The High Court ensured that all parties were duly informed about the proceedings through various modes of communication and set a date for the next hearing to address this specific issue along with the other issues raised in the petition.