GST refund claim allowed after excluding COVID-19 limitation period under Section 54 CGST Act

The AP HC allowed a petition challenging rejection of GST refund claim on time limitation grounds. Petitioner sought refund for April 2018-March 2019 period by filing application on 13.03.2021, which was rejected as it should have been filed by 19.05.2020 under Section 54 of CGST Act, 2017. The court held that excluding the period from 15.03.2020 to 14.03.2021 as per SC directions in limitation extension matter, the claim became timely. Matter remanded for reconsideration applying SC's limitation extension guidelines.

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Issues involved:
Challenge to the rejection of refund claim by the Deputy Commissioner of Central Tax for the tax period from April 2018 to January 2019 under Section 54 of the Central Goods and Service Tax Act, 2017.

Analysis:

1. The petitioner, engaged in the business of processing raw granite blocks and exporting polished granite slabs/tiles, filed a refund claim of Rs. 46,72,862 for the period from April 2018 to March 2019. The Deputy Commissioner rejected the claim, allowing only Rs. 6,07,516 for the period from February 2019 to March 2019. The petitioner challenged this rejection, arguing that it contravened Section 54 of the CGST Act and Rule 89(5) of the CGST Rules.

2. The petitioner's counsel contended that the Deputy Commissioner failed to consider the Supreme Court's order in a related case and a previous decision by the High Court that set aside a similar order for fresh consideration. The respondent's counsel argued that the petitioner's delay in filing the claim disentitles them to relief under Article 226 of the Constitution.

3. The Court noted that the petitioner filed the refund claim on 13.03.2021, responding to a show cause notice dated 26.03.2021, and cited the Supreme Court's order excluding the period from 15.03.2020 to 14.03.2021 for limitation purposes. As per this exclusion, the petitioner's claim should be accepted. The Court highlighted that the Deputy Commissioner did not consider this directive in their decision.

4. Consequently, the Court allowed the petition, setting aside the Deputy Commissioner's order rejecting the claim for the period from April 2018 to January 2019. The matter was remanded for fresh consideration, emphasizing compliance with the Supreme Court's directions in the order dated 08.03.2021. No costs were awarded for the petition, and pending interlocutory applications were closed.

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