Time bar for GST refund claims is mandatory, but writ relief may condone delay subject to safeguards and revenue rights.

Section 54's two year limitation for GST refund claims is mandatory and cannot be treated as directory because allowing extension would subvert the Act's interconnected limitation scheme and remedial timelines. Where the CGST Act contains no statutory mechanism to condone belated refund claims, writ jurisdiction under Article 226 remains available to remedy genuine hardship, subject to principles limiting writ relief. Courts may condone delay in appropriate cases, but any condonation must be case specific, balanced against revenue interests, and accompanied by corresponding enablement for the proper officer to invoke and prosecute related remedial provisions so as not to foreclose statutory rights.

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Issues: (i) Whether filing of an application within the time provided under Section 54 of the Central Goods and Services Tax Act, 2017 is mandatory? (ii) If (i) answered in the affirmative, whether the assessee/registered person is left with no remedy to claim genuine refunds? (iii) What is the mechanism to condone the delay in filing the refund application under Section 54 of the Central Goods and Services Tax Act, 2017?

Issue (i): Whether filing of an application within the time provided under Section 54 of the Central Goods and Services Tax Act, 2017 is mandatory?

Analysis: Section 54 prescribes a two-year period from the relevant date for filing refund claims; the relevant date is defined in the Explanation to Section 54. The CGST scheme is time-bound with interconnected limitation periods (notably Sections 73 and 74) that enable remedial action by the proper officer. No provision in the Act vests the proper officer with power to condone or extend the two-year period for refund claims. Interpreting the two-year period as directory would undermine the statutory scheme and enable circumvention of remedies and time-limits under Sections 73 and 74. The contextual use of discretionary language cannot override the purpose and connected statutory timelines in a fiscal statute.

Conclusion: The period of two years prescribed under Section 54 of the Central Goods and Services Tax Act, 2017 is mandatory.

Issue (ii): If Point (i) is answered in the affirmative, is the assessee/registered person left with no remedy to claim genuine refunds?

Analysis: The CGST Act lacks an internal mechanism to condone belated refund claims. Where the statutory scheme does not provide an adequate remedy, constitutional writ jurisdiction remains available. Article 226 provides a forum to address genuine hardship arising from tax wrongly paid, subject to established principles governing writ relief and limitation. Precedents permit writ relief for refunds where statutory remedies are inadequate, while recognising limits such as avoidable laches and existing defences available to revenue.

Conclusion: The absence of a remedy under the CGST Act does not oust the writ jurisdiction under Article 226; a person may invoke the High Court's writ jurisdiction to seek relief for genuine refund claims filed after the two-year period.

Issue (iii): What is the mechanism to condone the delay in filing the refund application under Section 54 of the Central Goods and Services Tax Act, 2017?

Analysis: Condonation of delay by the Court should be case-specific and balanced against the interests of revenue. If delay is condoned, corresponding extensions must be available to the proper officer to invoke Sections 73 and 74 where applicable, so that the revenue's remedial and investigatory rights are not foreclosed. Condonation should not operate to create unverifiable or prejudicial claims; it must enable fair consideration of the refund claim while preserving the availability of consequential actions by the authorities.

Conclusion: The Court may condone delay in filing refund claims under Section 54 in appropriate cases under Article 226; such condonation is subject to the condition that corresponding extension of time is granted to the proper officer to invoke and prosecute other applicable provisions (including Sections 73 and 74) as necessary.

Final Conclusion: The two-year limitation under Section 54 is mandatory, but where the Act provides no remedy for belated refund claims, the writ jurisdiction under Article 226 is available to seek condonation of delay; condonation must be granted on a case-by-case basis and, if granted, must be accompanied by corresponding extensions enabling the proper officer to exercise statutory powers under related provisions.

Ratio Decidendi: In the absence of statutory provision to condone time limits for refund claims under the Central Goods and Services Tax Act, 2017, the two-year period in Section 54 is mandatory for the proper officer, and writ jurisdiction under Article 226 can be invoked to condone delay in deserving cases provided that such condonation includes corresponding enablement for the proper officer to invoke and prosecute remedies under Sections 73 and 74 of the Act.

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