Commissioner condones delays in GST refund appeals but rejects claims under Section 54 limitation period for reversed Input Tax Credit

The Commissioner (Appeals) CGST, Jaipur condoned 18-20 day delays in filing refund appeals under Section 107(4) CGST Act, 2017 due to unavoidable circumstances. However, the appeals were rejected on merits. The Commissioner held that reversed Input Tax Credit constituted tax payment, not pre-deposit, making Section 54 limitation period applicable. Since refund claims were filed on 29-7-2020 but credit reversals occurred on 1-2-2018 and 2-2-2018, the claims exceeded the two-year limitation period. The PMT-04 form filed earlier was deemed merely a discrepancy intimation, not a valid refund application under GST provisions.

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Issues Involved:
1. Nature of the amount for which refund was filed (Pre-deposit or Tax).
2. Applicability of the limitation period for filing a refund under Section 54 of the CGST Act.
3. Determination of the relevant date for the purpose of the limitation clause.

Detailed Analysis:

Issue 1: Nature of the Amount for Refund (Pre-deposit or Tax)
- The appellant argued that the amounts of Rs. 5,83,251 and Rs. 10,89,495, which were reversed as CGST, should be considered as deposits and not as tax since they were not required to be paid. The appellant claimed these amounts were reversed based on the direction of the jurisdictional Superintendent and were later found admissible by departmental audit.
- The adjudicating authority observed that the amounts in question were related to transitional credit availed under Section 140 of the CGST Act, 2017, and were reflected in GSTR-3B for the months of December 2017 and January 2018. The appellant had the option to contest the issue but chose to reverse the credit, indicating satisfaction with the determination of credit. Therefore, the reversal of credit was considered a tax and not a deposit.

Issue 2: Applicability of the Limitation Period under Section 54 of the CGST Act
- The appellant contended that since the reversal of credit should not be considered as tax, the limitation period under Section 54 of the CGST Act should not apply.
- The adjudicating authority held that the reversal of ITC is indeed a tax and not a deposit. Since the appellant applied for a refund under Section 54 of the CGST Act, the limitation clause under this section is applicable. The authority also noted that the judgments cited by the appellant, such as Union of India v. ITC Limited and K.V.R. Constructions v. CCR, Bangalore, were not applicable as they pertained to erstwhile Central Excise provisions and not to CGST provisions.

Issue 3: Determination of the Relevant Date for the Limitation Clause
- The appellant argued that the relevant date for the limitation period should be the date of discovery of the mistake (17-9-2019) and not the date of reversal of credit (1-2-2018). They cited the judgment in Indo-Nippon Chemicals Co. Ltd. v. Union of India to support their claim.
- The adjudicating authority found that the reversal of credit was done by the appellant himself, indicating no mutual mistake. The authority determined that the relevant date for the limitation period, as per clause (h) of sub-section (14)(2) of Section 54 of the CGST Act, is the date of payment of tax. Since the reversal of ITC was on 1-2-2018 and 2-2-2018, and the refund claim was filed on 29-7-2020, it was beyond the expiry of two years from the relevant date.

Conclusion:
- The adjudicating authority concluded that the refund applications were filed after the expiry of two years from the relevant date and were thus time-barred. Both appeals filed by the appellant were rejected, and the orders dated 26-8-2020 and 24-8-2020 were upheld. The appeals were disposed of accordingly.

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