Mandatory GST refund timelines control scrutiny and disposal; late procedural steps can vitiate rejection

The text explains that, in GST refund proceedings, Section 54(7) of the West Bengal GST Act is treated as imposing a mandatory 60-day framework for scrutiny and disposal, supported by Rules 90(2) and 92(3). It notes that delay in acknowledgment, notice, reply scheduling, and final decision can vitiate the refund adjudication, and that interest on delayed refund under Section 56 reinforces the statutory timeline. It also states that, once a refund application is acknowledged as complete, the authority cannot reject it on extraneous grounds outside the refund scrutiny process.

---

---

Issues: (i) Whether the period of 60 days under Section 54(7) of the West Bengal Goods and Services Tax Act, 2017 is mandatory; (ii) whether the orders rejecting the refund claim were otherwise bad in law; (iii) the scope of interference in the intra-court appeal.

Issue (i): Whether the period of 60 days under Section 54(7) of the West Bengal Goods and Services Tax Act, 2017 is mandatory.

Analysis: The refund machinery under Section 54 of the West Bengal Goods and Services Tax Act, 2017 was read with Rule 90(2) and Rule 92(3) of the West Bengal Goods and Services Tax Rules, 2017. The Court held that the use of the word "shall" in Section 54(7) indicates a mandatory outer limit, and that the statutory scheme requires completion of scrutiny, issuance of acknowledgment, issuance of notice, reply, hearing, and final order within the prescribed framework. Section 56 of the same Act, which provides interest on delayed refund, was treated as reinforcing rather than diluting the mandatory character of the time limit.

Conclusion: The 60-day period under Section 54(7) is mandatory, and breach of that limit vitiates the refund order.

Issue (ii): Whether the orders rejecting the refund claim were otherwise bad in law.

Analysis: The acknowledgment under Rule 90(2) was issued beyond 15 days, the show-cause notice under Rule 92(3) was issued late, and the reply date was fixed beyond the statutory outer limit. Once the application had been acknowledged as complete, the authority could not travel beyond the scope of refund scrutiny to reject the claim on grounds such as the size of the premises, absence of e-way bills, or alleged foreign customs information. The Court also held that the relevant refund claim was supported by Indian customs documents and export particulars, and that matters arising after export clearance were extraneous to the refund adjudication under the GST regime.

Conclusion: The refund rejection and the appellate affirmation were held to be unsustainable in law.

Issue (iii): The scope of interference in the intra-court appeal.

Analysis: The Court found that the earlier judgment failed to distinguish between the scrutiny stage under Rule 90(2) and the adjudicatory stage under Rule 92(3), and that the mandatory timelines were applied inconsistently. Since the violation of the statutory procedure was evident on the face of the record, interference in appeal was justified.

Conclusion: Interference was warranted and the impugned judgment could not stand.

Final Conclusion: The refund proceedings were set aside and the appellant was entitled to refund of the claimed amount with statutory interest.

Ratio Decidendi: In refund proceedings under the GST regime, the prescribed time limits and procedural safeguards for scrutiny, notice, reply, hearing, and disposal are mandatory, and non-compliance vitiates the refund adjudication.

---