Landmark Ruling: IGST Refund Claim Upheld, COVID-19 Period Exclusion Validates Petitioner's Challenge to Appellate Order

HC allowed petitioner's challenge to appellate order rejecting IGST refund claim. Court directed refund of Rs. 7,34,732, considering COVID-19 period exclusion under notification No.13/2022-C.T. The order was quashed, mandating refund within two months, finding the original appellate decision unsustainable based on time-bar calculation.

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Issues involved: Challenge to appellate order rejecting refund claim under IGST Act, exclusion of period due to COVID-19 impact, entitlement to refund under notification No.13/2022-C.T., disallowance of refund claim for wrong ITC claim.

Summary:

Challenge to Appellate Order:
The petitioner, a Business Process Outsourcing company, challenged an appellate order rejecting its refund claim of Rs. 7,34,732 under the Integrated Goods and Services Tax Act, 2017. The petitioner exports services under a letter of undertaking without payment of IGST and seeks refund of unutilised Input Tax Credit (ITC) under Section 16(3) of the IGST Act read with Section 54 of the CGST Act.

Exclusion of Period due to COVID-19 Impact:
The petitioner exported services from April 2018 to March 2019 and filed a refund application on 04.09.2020. The petitioner faced delays due to the COVID-19 pandemic and requested condonation of the same. The appellate authority considered only the export turnover from September 2018 to March 2019, excluding the earlier period as time-barred.

Entitlement to Refund under Notification No.13/2022-C.T.:
The petitioner argued that the limitation period for filing a refund application should exclude the period from 01.03.2020 to 28.02.2022, as per notification No.13/2022-C.T. This exclusion would render the refund claim within the time limit, as per Section 54 of the CGST Act.

Disallowance of Refund Claim for Wrong ITC Claim:
The show cause notice highlighted a sum of Rs. 9,22,424 as a wrong ITC claim, with specific reasons for disallowance. The appellate order rejected the refund claim of Rs. 7,34,732 mainly due to being time-barred, without citing additional reasons. However, the Court found this conclusion unsustainable and directed the refund of the said amount to the petitioner within two months.

In conclusion, the Court quashed the impugned order, directing the refund of Rs. 7,34,732 to the petitioner, considering the exclusion of the COVID-19 impacted period for limitation computation under the CGST Act.

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