ITC Refund Claim Succeeds as COVID-19 Time Extensions Validate Petitioner's Timely Application for Tax Credit Recovery

HC allowed the petitioner's ITC refund claim, overturning previous rejections. The court considered COVID-19 period exclusions and directed authorities to process the refund within two weeks, finding the application was timely filed when pandemic-related time extensions were factored into the limitation period.

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Issues:
The petitioner sought refund of unutilised Input Tax Credit (ITC) for zero-rated supplies. The authorities rejected the refund application as time-barred under Section 54(1) of the Central Goods and Services Tax Act, 2017 (CGST Act).

Impugned Orders and Appeals:
The petitioner challenged orders dated 28.01.2022 and 11.08.2023 denying the refund of unutilised ITC. The appellate authority upheld the rejection on the ground of limitation.

Contentions and Arguments:
The petitioner argued that the delay in filing the refund application was due to the COVID-19 pandemic, which disrupted operations. The petitioner cited the Hon'ble Supreme Court's order and a notification by the Central Board of Indirect Taxes and Customs (CBIC) excluding the period from 1st March, 2020 to 28th February, 2022 for filing refund applications under the CGST Act.

Decision and Rationale:
The High Court set aside the impugned orders, stating that the petitioner's application fell within the time limit if the excluded period was considered. The Court directed the respondents to process the refund application with applicable interest within two weeks. The petitioner's entitlement to refund was upheld based on the relevant legal provisions and notifications.

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