Limitation and mistake of law: refund rejection based on statutory time-bar unsustainable; fresh refund application permitted.

Rejection of a refund claim solely on the ground that it was filed beyond the statutory period under Section 54 of the CGST Act is unsustainable where identical tax was paid twice and supporting payment evidence was placed before the authority. The principles governing recovery of amounts retained without legal authority and claims arising from mistake of law-including Limitation Act doctrines and discovery of mistake-apply and can displace the special-law time bar. An administrative rejection must stand on its stated grounds; the payment evidence obliges reconsideration and a fresh refund filing and decision in accordance with law.

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Issues: Whether rejection of the petitioner's application for refund of taxes paid twice can be sustained on the ground of limitation under Section 54 of the Central Goods and Services Tax Act, 2017.

Analysis: The record establishes that identical tax amounts were discharged twice for the same transactions - once by utilising the credit ledger and later by utilising the cash ledger - and supporting payment evidence and bank details were placed before the authority. Where an amount has been paid and retained without authority of law, Article 265 of the Constitution of India precludes the State from retaining such funds. Precedents recognise that claims for refund of amounts paid under a mistake of law are not necessarily governed by the statutory limitation prescribed for refunds under the special law and that the Limitation Act and principles relating to discovery of mistake may govern such claims. An order of rejection must be judged by the grounds stated in that order and cannot be sustained by fresh or different reasons raised subsequently.

Conclusion: The rejection of the refund application solely on the ground that it was filed beyond the period prescribed under Section 54 of the Central Goods and Services Tax Act, 2017 is unsustainable. The impugned order rejecting the refund is quashed and set aside; the petitioner is permitted to file a fresh refund application within a fortnight and the authority shall decide it in accordance with law and the discussions above, failing which interest as directed shall accrue.

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