Refund claim time-barred under CGST Act; natural justice upheld

The appellate authority upheld the adjudicating authority's decision that the refund claim was time-barred under Section 54 of the CGST Act, 2017, as it was filed after the two-year limitation period from the date of supply to the SEZ unit. The principle of natural justice was found to have been followed in the case, as the adjudicating authority provided sufficient reasoning for rejecting the claim. Consequently, the appellant's appeal was rejected, and the order was disposed of accordingly.

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Issues Involved:
1. Whether the refund claim is time-barred as per the provisions of Section 54 of the CGST Act, 2017.
2. Whether the principle of natural justice has been followed in the instant case.

Issue-wise Detailed Analysis:

1. Whether the refund claim is time-barred as per the provisions of Section 54 of the CGST Act, 2017:

The appellant filed a refund claim under Section 54 (3) (i) of the CGST Act, 2017 for supplies to SEZ on payment of IGST. The adjudicating authority issued a show cause notice stating that the refund claim was time-barred as it was filed after two years from the date of supply of goods to the SEZ unit (25.07.2017). The appellant argued that the tax on the SEZ supply was paid on 19.10.2018 when the GSTR-3B for September 2018 was filed, and thus the two-year limitation period should start from this date.

The adjudicating authority, however, contended that the relevant date for calculating the limitation period should be the date of supply of goods to the SEZ unit (26.07.2017), making the refund claim time-barred. The appellate authority agreed with this interpretation, stating that the relevant date for zero-rated supply should be taken as per clause (a) of explanation 2 (2) of sub-section (14) of Section 54 of the CGST Act, 2017, which in this case is 26.07.2017. Therefore, the refund claim filed on 17.10.2020 was beyond the permissible period and thus time-barred.

2. Whether the principle of natural justice has been followed in the instant case:

The appellant contended that the adjudicating authority failed to pass a speaking order and did not provide sufficient basis for rejecting the refund claim, thereby violating the principle of natural justice. The appellant cited judgments from JAY JAY MILLS (INDIA) PVT. LTD. Vs. STATE TAX OFFICER, TIRUPUR, and IPC PACKAGING COMPANY PVT. LTD. Vs. ADDL. C.C., ICD, BANGALORE to support this contention.

The appellate authority examined the show cause notice dated 29.10.2020 and the order dated 17.11.2020 and found that the adjudicating authority had properly mentioned and elaborated the reasons for rejecting the refund claim. Consequently, the appellate authority concluded that the principle of natural justice had been followed, and the cited judgments were not applicable to the instant case.

Conclusion:

The appellate authority upheld the adjudicating authority's decision, finding no infirmity in rejecting the refund claim. The appeal filed by the appellant was thus rejected, and the order was disposed of accordingly.

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