Tax Credit Refund Victory: Manual Applications Reinstated for Dec 2017-Mar 2018 Period Under Rule 97-A

The SC ruled in favor of the petitioner, allowing refund applications for input tax credit from December 2017 to March 2018. The court directed respondents to process manual refund applications under Rule 97-A of GST Rules, finding the original rejection invalid. The amendment to Section 54(1) was deemed prospective, and the two-year limitation period was adjusted considering the COVID-19 exclusion period.

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Issues involved:
The issues involved in the judgment are the refusal of refund of excess input tax under the GST Act for the months of December 2017 to March 2018 based on delay in filing the application and the applicability of the amendment made to Section 54(1) of the GST Act in 2019.

Refusal of Refund for December 2017 to March 2018:
The petition challenges the rejection of refund applications for the months of December 2017 to March 2018 due to delay in filing and unavailability of the application for the previous month. The petitioner argues for manual filing and processing of refund under Section 97-A of the GST Act, citing the case of Laxmi Organic Industries Ltd. vs. Union of India. The petitioner contends that the amendment to the definition of 'relevant date' should be applied prospectively, not prior to 01/02/2019.

Calculation of Two-Year Limitation for Refund:
The Assistant Government Pleader argues that the two-year limitation for filing refund applications should be calculated based on the amended provision effective from 2019. Since the application was not filed within the due date as per the amended provision of Section 54(1) of the GST Act, it was rightly rejected.

Exclusion of Period for Delay:
The exclusion of the period between 15/03/2020 to 28/02/2022 by the Hon'ble Apex Court is considered, making the application filed on 13/5/2020 for December 2017 within the time limit. This exclusion affects the timeliness of the refund application.

Applicability of Amendment to Section 54(1) of the GST Act:
The judgment determines that the amendment to Section 54(1) of the GST Act is prospective unless specified otherwise. As the amendment does not specify retrospective application, the earlier definition of 'relevant date' applies to the petitioner's refund application for December 2017.

Decision and Order:
The Court holds that the petitioner's application for refund of input tax for December 2017 should have been entertained by the respondents. Additionally, the petitioner is allowed to file manual applications for refund for the months of January to March 2018 as per Rule 97-A of the GST Rules. The respondents are directed to accept and process the refund applications according to the applicable rules. No costs are awarded in this matter.

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