2022 (1) TMI 492 - HC - GST

GST refund claim dismissed as time-barred under Section 54 CGST Act filed five months after two-year limitation period expired

HC dismissed the petition for GST refund filed by the petitioner claiming tax was paid by mistake on non-supply of services. The court held that tax was ... Refund claim - time limitation - it is claimed that tax was paid by mistake on account of non-supply of any service either wholly or partially - Section 54 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- In this case, the tax was paid on 20.12.2017. Thus, the refund claim if it was to be filed ought to have been filed by the petitioner within the period of limitation prescribed under the Act. The refund claim should have been filed on or before 19.12.2019. However, refund claim was filed only on 30.05.2020. The refund claim was thus beyond the period of limitation prescribed under Section 54 of the CGST Act, 2017. In fact, if there was a wrong entry as was argued, the petitioner should have taken steps for rectification of the returns under proviso to Sub Section (9) to Section 39 of the Act - in this case, the petitioner has given a specific date of the invoice ie. 1.11.2017 and paid tax. Therefore, refund under Section 54 of the TNGST & CGST Act, 2017 cannot be entertained by the respondent. The option available to the petitioner was to request its customer/client M/s.Caterpillar India Private Limited to issue an appropriate credit notes to neutrilize the alleged excess payment of GST while generating and issuing invoices dated 01.11.2017 details of which was captured in their regular return and tax was paid - refund claim filed by the petitioner is clearly barred under the limitation prescribed under Section 54(1) of the respective enactments read with explanation (h). Petition dismissed. Issues:1. Refund claim filed beyond the limitation period under Section 54 of the CGST Act, 2017.2. Alleged excess payment of tax by the petitioner due to system error post-merger with Transferor Company.3. Dispute regarding the generation of invoices and payment of tax without actual supply of service.4. Applicability of Circular No.26/26/2017-GST dated 29.12.2017 in the present case.5. Interpretation of relevant provisions of the CGST Act, 2017 in relation to refund claims and limitations.Analysis:1. The petitioner claimed a refund of tax paid on 01.11.2017, beyond the two-year limitation period prescribed under Section 54(1) of the CGST Act, 2017. The court held that the refund claim filed on 30.05.2020 was time-barred, as it should have been submitted by 19.12.2019, based on the payment date.2. The petitioner argued that post-merger with the Transferor Company, system errors led to the payment of tax on invoices mistakenly picked up by the system. However, the court emphasized that the petitioner should have rectified such errors promptly under the Act.3. The dispute arose from the generation of invoices and payment of tax without actual service supply. The court noted that the petitioner paid tax on invoices dated 01.11.2017, even though they were not generated by the petitioner. The respondent contended that the petitioner failed to provide evidence of tax payment on earlier occasions or that the customer did not claim Input Tax Credit.4. The petitioner relied on Circular No.26/26/2017-GST, emphasizing the need for refunds in cases of excess payment. However, the court found that the circular applied to situations where double reporting occurred, not applicable to the petitioner's case where invoices were generated.5. The court interpreted Section 54 and its explanation under the CGST Act, 2017, emphasizing the need for timely refund claims and the consequences of missing the limitation period. The petitioner's failure to rectify errors promptly and the late filing of the refund claim led to the dismissal of the writ petition.In conclusion, the court dismissed the petition, highlighting the petitioner's obligation to rectify errors promptly and engage with the customer to address the alleged excess tax payment. The judgment underscored the importance of adhering to statutory limitations for refund claims under the relevant GST enactments.