Refund Claim Under CGST Act Allowed Despite Time-Bar, Authority Directed to Process Application Within 12 Weeks

HC analyzed refund application under CGST Act, 2017, addressing time-bar issues. Court considered government notifications excluding limitation periods and directed competent authority to process refund claim within 12 weeks. The ruling clarified relevant dates for filing refund applications and provided relief to petitioner by mandating refund processing with potential statutory interest if found eligible.

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Issues:
1. Refusal of refund application under section 54 of the Central Goods and Services Tax Act, 2017 (CGST Act, 2017) as belated.
2. Interpretation of relevant date for filing refund application.
3. Impact of notifications excluding specific periods for computation of limitation for filing refund applications.
4. Dispute over the time limit for filing refund application.

Analysis:
1. The High Court addressed the issue of the authorities' refusal to sanction the refund, citing the belated filing of refund applications under section 54 of the CGST Act, 2017. The Respondent No. 2 set aside the order sanctioning the refund, stating that the claim was time-barred as it was filed beyond two years from the relevant date.

2. The Petitioner argued that the Respondent No. 2 considered the due date of filing the monthly return under section 39 of the CGST Act, 2017 as the relevant date, which was substituted with the end of the financial year from 01.02.2019. The Petitioner contended that the refund application filed on 23.10.2020 was not time-barred from the relevant date as it stood at the end of the financial year.

3. The Court considered the impact of notifications issued by the Central Government, excluding specific periods for the computation of the limitation for filing refund applications. The Notification dated 5.7.2022, under section 168A of the CGST Act, 2017, excluded the period from 1st March, 2020 to 28.02.2022 for the computation of the limitation for filing refund applications under section 54 or section 55 of the said Act.

4. In light of the notifications and the submissions made by both parties, the Court directed the competent authority to process the refund claim of the petitioners within time and grant the refund with statutory interest if found eligible. The competent authority was instructed to complete the process within 12 weeks from the date of receipt of the court's order, thereby disposing of the petition accordingly.

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