Limitation exclusion for GST refund claims: rejection based only on the excluded period was unsustainable and the application had to be reconsidered.

A refund claim rejected solely as time-barred under the CGST Act could not stand where the limitation period from 1 March 2020 to 28 February 2022 was excluded by notification for refund applications under Sections 54 and 55. Once that exclusion was applied, the limitation objection ceased to survive, and the rejection on limitation was unsustainable. The refund application was therefore required to be restored for fresh processing on merits without raising limitation again.

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Issues: Whether the refund application could be rejected as time-barred under Section 54(1) of the Central Goods and Services Tax Act, 2017 in view of the exclusion of the period from 1 March 2020 to 28 February 2022, and whether the rejection order required interference.

Analysis: The refund claim had been rejected solely on limitation. A subsequent notification issued by the Central Board of Indirect Taxes and Customs directed exclusion of the period from 1 March 2020 to 28 February 2022 for computing limitation for refund claims under Sections 54 and 55 of the Central Goods and Services Tax Act, 2017. On that basis, the limitation objection no longer survived for the refund applications in question, and the State accepted that the matter should be reconsidered.

Conclusion: The rejection on limitation was unsustainable and the refund application was to be restored for fresh processing on merits without raising the issue of limitation.

Ratio Decidendi: Where an applicable exclusion period is notified for computing limitation under the refund provisions of the Central Goods and Services Tax Act, 2017, a rejection founded only on the excluded period cannot be sustained.

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