IGST refund application filed within two years under Section 54(1) stops limitation period despite later document requests

Delhi HC allowed the petition challenging rejection of IGST refund application on limitation grounds. The court held that a complete application filed within the prescribed two-year period under Section 54(1) of CGST Act stops the limitation period from running, even if the proper officer subsequently seeks additional documents for verification. The refund application was deemed complete under Rule 89(2) of CGST Rules as it contained required invoices and bank certificates. The rejection order was set aside, establishing that deficiency notices for additional verification documents cannot render a complete application time-barred.

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Issues Involved:
1. Rejection of refund claim on the grounds of being filed beyond the stipulated period.
2. Validity of the impugned Circular and Rule 90(3) of the CGST Rules.
3. Completeness of the refund application as per the CGST Rules.

Summary:

1. Rejection of refund claim on the grounds of being filed beyond the stipulated period:
The petitioner, National Internet Exchange of India, contested the rejection of its IGST refund claim for zero-rated supplies, which was denied by the Assistant Commissioner, Department of Trade and Taxes, on the grounds that the application was filed beyond the period stipulated under Section 54(1) of the CGST Act. The petitioner argued that its initial application was timely and subsequent applications were merely clarifications to address deficiencies highlighted by the concerned officer.

2. Validity of the impugned Circular and Rule 90(3) of the CGST Rules:
The petitioner challenged the impugned Circular No. 125/44/2019-GST dated 18.11.2019 and Rule 90(3) of the CGST Rules as unconstitutional and ultra vires the CGST Act. The court, however, did not find it necessary to examine this broader challenge as the case was covered by a precedent set in Bharat Sanchar Nigam Limited v. Union of India & Ors.

3. Completeness of the refund application as per the CGST Rules:
The court examined whether the petitioner's refund application was complete in terms of Rule 89(2) of the CGST Rules. It was noted that the application was accompanied by the necessary documents as prescribed. The court held that the application could not be disregarded simply because the proper officer sought further clarifications. The period of limitation would stop running once the application, complete with the required documents, was filed.

Conclusion:
The court allowed the petition, setting aside the impugned order dated 13.04.2022, and directed that the refund application be reconsidered on its merits by the proper officer. The petition was allowed, and the pending application was disposed of accordingly.

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