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of <h1>Mandatory 60-Day Deadline Under Section 54(7) WBGST Act Must Be Strictly Followed for Refund Orders</h1> <h3>Suraj Mangar Versus The Assistant Commissioner of West Bengal State Tax and Others.</h3> Suraj Mangar Versus The Assistant Commissioner of West Bengal State Tax and Others. - TMI ISSUES: Whether the 60-day period under Section 54(7) of the West Bengal Goods and Services Tax Act, 2017 ('the Act') for passing an order on refund applications is mandatory or directory.Whether the rejection orders of the refund claim by the Proper Officer and the Appellate Authority are valid and sustainable in law.The scope and extent of judicial interference in an intra-court appeal challenging orders under the Act. RULINGS / HOLDINGS: The statutory time limit of 60 days as stipulated in Section 54(7) of the Act is mandatory and non-compliance vitiates any order passed under Section 54(5). The use of the word 'shall' in Section 54(7) indicates an imperative requirement.The orders rejecting the refund claim are bad in law due to multiple violations of the statutory timelines, including issuance of acknowledgment beyond 15 days as required under Rule 90(2), issuance of Show Cause Notice after an inordinate delay, and fixing the date of reply beyond the 60-day limit, leaving no time for the mandatory opportunity of hearing and consideration of the reply as required under Rule 92(3) and its proviso.The Proper Officer exceeded jurisdiction by relying on extraneous and irrelevant considerations such as alleged absence of E-way Bills where exempted under Rule 138(14)(b), and unverified information from foreign Customs Authorities, disregarding conclusive Indian Customs documents proving export and payment of duties.Judicial interference in the intra-court appeal is justified where there is a clear violation of mandatory statutory provisions and the impugned orders are palpably vitiated by contravention of law. RATIONALE: The Court applied the provisions of Section 54 of the Act and the corresponding Rules 90 and 92 of the West Bengal Goods and Services Tax Rules, 2017, interpreting the timelines as mandatory due to the use of the word 'shall' and the taxing nature of the statute requiring strict compliance.The Court relied on authoritative precedents from the Delhi High Court, including Smartadmedia v. Commissioner of Delhi GST and M.D. Securities Pvt. Ltd. v. Sales Tax Officer Avato, which held that non-adherence to timelines results in loss of the authority's right to point out deficiencies and mandates refund.The Court referred to Circular No. 125/44/2019-GST issued by the Central Board of Indirect Taxes and Customs, which advises that final sanction and payment orders be issued within 45 days from the ARN generation to ensure disbursement within 60 days, underscoring the mandatory nature of timelines.The Court rejected the argument that Section 56 of the Act (providing for interest on delayed refunds) renders Section 54(7) directory, reasoning that interest provisions emphasize rather than dilute the mandatory nature of the 60-day limit.The Court distinguished Section 75 of the Act as pertaining to demand and recovery and not applicable to refund proceedings under Section 54.The Court emphasized that the Proper Officer's jurisdiction is limited to verifying payment of duties and taxes evidenced by prescribed documents (shipping bills, export invoices, and Indian Customs clearances) and does not extend to verifying receipt of goods by the importer or relying on foreign customs information.The Court underscored the procedural safeguards under Rule 92(3), including the requirement of issuing a Show Cause Notice, allowing 15 days to reply, providing an opportunity of hearing, and considering the reply before passing an order, all within the 60-day outer limit.The Court held that failure to adhere to these timelines and procedural safeguards vitiates the refund rejection orders and mandates refund with interest.The Court found the impugned judgment erred in holding timelines directory and misapplied the statutory scheme, justifying interference in the intra-court appeal.
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