TaxTMI 
TaxTMI 
2025 (11) TMI 1419
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.... b) Issue a writ of certiorari, or a writ or order or direction in the nature of writ of certiorari and to hold that the Impugned Order passed by the Respondent No. 3 vide Order No. 31/2024-25 dated 27.05.2024 in Annexure-B was passed without the authority of law and without jurisdiction. c) Issue a writ of certiorari, or a writ or order or direction in the nature of writ of certiorari and to hold that the action of the Respondent No. 3 is retaining or withholding the IGST of Rs. 52,63,596/- is without authority of law and against the Article 265 of the Constitution of India. d) Issue a writ of mandamus, or a writ or order or direction in the nature of writ of mandamus by ordering the Respondent No. 3 to refund the IGST of Rs. 52,63,596/- paid during the GSTR-3B return filed for the month of November 2017 along with interest. e) Issue any other direction or grant any other relief, as deemed fit in the facts and circumstances of this case, in the interest of justice. f) Issue a direction to provide for the cost of this petition. In W.P.No.27261/2024, petitioner seeks for the following reliefs: a) Issue a writ of certiorari, or a writ....
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....led for the month of October 2017 along with interest. e) Issue any other direction or grant any other relief, as deemed fit in the facts and circumstances of this case, in the interest of justice. f) Issue a direction to provide for the cost of this petition. In W.P.No.27691/2024, petitioner seeks for the following reliefs: a) Issue a writ of certiorari, or a writ or order or direction in the nature of writ of certiorari and set aside the Impugned Order passed by the Respondent No. 3 vide Order No. 27/2024-25 dated 25.05.2024 in Annexure-B as bad in law. b) Issue a writ of certiorari, or a writ or order or direction in the nature of writ of certiorari and to hold that the Impugned Order passed by the Respondent No. 3 vide Order No. 27/2024-25 dated 25.05.2024 in Annexure-B was passed without the authority of law and without jurisdiction. c) Issue a writ of certiorari, or a writ or order or direction in the nature of writ of certiorari and to hold that the action of the Respondent No. 3 is retaining or withholding the IGST of Rs. 54,52,930/- is without authority of law and against the Article 265 of the Constitution of India. ....
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....gust, 2017 and September 2017, for which, the petitioner is said to be in receipt of commission income. 4. It is contented that the petitioner who is regularly filing its returns under GST Law was under the bona fide belief/impression that the services provided by them to the foreign entity qualified as export of services and accordingly, paid IGST in their GST or 3B returns filed for the periods November 2017, July, 017, October, 2017, August, 2017 and September 2017 under the provisions of the Integrated Goods and Services Tax Act, 2017 ('IGST Act' for short). The petitioner paid the said IGST to the Central Government in December, 2017, July, 2017, October, 2017, August 2017 and September, 2017. Subsequently, the petitioner having realised that the services rendered by them did not qualify as export of services and that the same was not Inter-State supply, but was actually in fact Intra-State supply, discharged and paid State GST under the Provisions of the Karnataka Goods and Services Tax Act, 2017, by making the payment in Form GST or 3B in the month of March 2018. Subsequently, refund application dated 30.03.2024 was filed by the petitioner before respondent Nos. 2 and 3 -....
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....missioner of GST in (Appeals-1) -[(2023) 12 Centax 230 (Mad.) and by the High Court of Andhra Pradesh in the case of Nspira Management Services Private Limited v. Assistant/Deputy Commissioner of Central Tax in W.P.Nos.18287 and 14905/2024 dated 26.09.2025. He would place reliance upon the following judgments: i. Lenovo (India) Pvt. Ltd. vs. Joint Commissioner of GST (Appeals-1) - (2023) 12 Centax 230 (Mad.); ii. Louis Dreyfus Company Pvt. Ltd. vs. Union of India (2025) 33 Centax 418 (A.P.) [14-08-2025]; iii. Nspira Management Services Private Limited vs. Assistant/Deputy Commissioner of Central Tax [WRIT PETITION Nos.18287 & 14905 of 2024]. 7. The High Court of Madras in the case of Lenovo (India) Pvt. Ltd v. Joint Commissioner of GST in (Appeals-1) - (2023) 12 Centax 230 (Mad.), has held as under: "13. In the present case, the applications made by the petitioner for refund of IGST paid for the supply of goods made to SEZ units in respect of December, 2019, January, 2020 and February, 2020 came to be rejected partially on the following grounds: (i) Inordinate delay in obtaining endorsement; inappropriate endorsement; endorsement does....
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....on payment of integrated tax and claim refund of such tax paid on goods or services or both supplied.' Rule 30(4) of the SEZ Rules, 2006: 'A copy of the document referred to in sub-rule (1) or copy of Bill of Export, as the case may be, with an endorsement by the authorized officer that the goods have been admitted in full into the special economic zone shall be treated as proof of export and copy with such endorsement shall also be forwarded by the unit or developer to the Goods and Services Tax or Central Excise Officer having jurisdiction over the DTA supplier within 45 days failing which, the Goods and Services Tax or Central Excise Officer, as the case may be, shall raise demand of tax or duty against the domestic tariff supplier'." 14.2 A conjoint reading of section 16(3) of the IGST Act, 2017 and rule 30(4) of the SEZ Rules, 2006 would make it clear that the goods can be supplied to SEZ under two situations. One in terms of section 16(3)(a) and another in terms of section 16(3)(b). In terms of section 16(3)(a), goods can be supplied without payment of tax, upon execution of bond or letter of undertaking. In terms of section 16(3)(b), goods can be s....
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....only be the petitioner and the interest of the Department not going to be affected in any way. Thus, the refund cannot be denied on any other reason whatsoever, since, it is the petitioner's legal entitlement to get back the refund of tax paid by him. If at all, there is any lapse, the same has to be sought to be rectified by the petitioner and the application can be processed by the Department to grant refund. If the goods entered into SEZ and endorsement is made after the expiry of 45 days, in such circumstances, if the concerned Officer raised a demand under rule 30(4) of the SEZ Rules, and the assessee paid demand of tax, in those cases also, the assessee is entitled to for refund. Therefore, significance of the endorsement is only to ensure that the goods have entered into SEZ and also for the purpose of payment of tax or demand against the DTA supplier. 14.5 In the case on hand, it is an admitted fact that the goods have entered into SEZ and duty has also been paid by the petitioner. Therefore, the failure to obtain endorsement within 45 days is not due to fault on the part of the petitioner and it is for the AO to make endorsement in time, for which, the petitioner ....
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....n full and that the endorsement is incomplete/insufficient/inappropriate, is not tenable. Hence, the findings rendered by the respondent-Department with regard to the denial of claim by citing the delay in obtaining endorsement, endorsement is inappropriate, etc., are set aside. Rejection of claim as barred by limitation since POD was made not at the time of filing applications but at the time of filing reply/personal hearing. 15. So far as the second issue relating to denial of claim on the ground that the application is barred by limitation is concerned, it is seen that section 54(1) of the CGST Act prescribes time-limit of two years only for filing the refund application and accordingly, the petitioner filed claim for the months of December, 2019, January 2020 and February 2020 on the following dates (i) December 14, 2021, (ii) January 27, 2022, and (iii) February 26, 2022, which were well within the period of limitation and the same is not disputed by the respondent-Department, however, the respondent-Department objection is only with regard to the non-furnishing of supportive documents at the time of filing application but producing the same at the time of pe....
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.... the application has no deficiencies but thereafter, issued a show-cause notice in Form RFD-08 proposing to reject the claim for refund to an extent of Rs. 84,80,988, which is incorrect. If it is the case of the respondent-Department that the petitioner has filed the applications with deficiencies, the respondent-Department ought to have issued any memo pointing out such deficiency under rule 90(3), instead the second respondent has accepted the petitioner's applications and issued acknowledgment, and therefore, it is not open to the respondent to contend that the supporting documents were filed with a delay. 15.4 Further, it is noticed that, in respect of the claim made for the month of December, 2019, the petitioner has furnished supportive documents only at the time of filing of reply/personal hearing on January 28, 2022 and the same had been accepted by the respondent-Department and the Department also processed the application, while that being so, the respondent-Department cannot take a different stand in respect of the claim made for subsequent period, viz., January 2020, by citing that the documents were filed belatedly, and therefore, claim is not acceptable. ....
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.... when requested, freely advise assessees the way in which entries should be made in various forms, they should not themselves make any in them on their behalf. Where such advice is given, it should be clearly explained to them that they are responsible for the entries made in any form and that they cannot be allowed to plead that they were made under official instructions. This equally applies to the Public Relation Officers. 6. The intention of this circular is not that tax due should not be charged or that any favour should be shown to anybody in the matter of assessment, or that where investigations are called for, they should not be made. Whatever the legitimate tax it must be assessed and must be collected. The purpose of this circular is merely to emphasize that we should not take advantage of an assessee's ignorance to collect more tax out of him than is legitimately due from him." 15.6 Thus, on a reading of the above circular would make it clear that when the taxpayer made a claim for refund and if there is any discrepancies or defects in the application made for such claim, the Officer concerned should come forward to assist the assessee bearing in mind t....
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....wo years, the legitimate claim of refund by the assessee cannot be denied in appropriate cases. 15.8 In the present case, the application was filed within two years and therefore, the question of making claim after two years does not arise even assuming AO made endorsement after two years, the same would in no way debar the claim as barred by limitation. Further, even rule 90(3) of the CGST Act permits to make fresh application, which means that in appropriate cases, the Officer concerned can permit the refund application even beyond the period of limitation. Therefore, I do not find any substance in the submission made by the learned Senior Standing Counsel for the respondent and both respondents have miserably failed to consider the said aspect while passing the impugned orders and hence, the same are liable to be set aside. Hence, this court holds that when the petitioner has filed application, which is within a period of limitation, viz., two years as stipulated under section 54(1) of the CGST Act, the delay in filing the supporting document at the time of filing of reply/personal herein would only extend the time-limit to pass an order under section 54(7) of the CGST ....
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....ed orders are set aside and consequently, the second respondent is directed to process the petitioner's applications for refund and issue the refund within a period of 30 days from the date of receipt of a copy of this order. No costs." 8. The High Court of Andhra Pradesh in the case of Louis Dreyfus Company Pvt. Ltd. v. Union of India - (2025) 33 Centax 418 (A.P.) [14-08-2025], has held as under: "As identical issues are involved in the present set of cases and as the writ petitioner and the respondents are same, they are being disposed of by way of this common order. 2. Heard Sri. M. Sai Sundeep, learned counsel appearing for the petitioner, Sri. Narasimha Rao Gudiseva learned Central Government Standing Counsel appearing for the 1st respondent, learned G.P. for Revenue appearing for the 2nd respondent and Sri. P.S.P. Suresh Kumar, learned counsel appearing for respondents 3 to 6. 3. The petitioner is a registered person and is in the business of import of agricultural products for onward use and sale within India. The petitioner had imported certain agricultural products on CIF basis and paid GST on ocean freight charges, on reverse charge mechanism....
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....ed and no refund application was maintainable. There is no dispute that the applications for refund have been filed beyond the time stipulated under section 54 of the G.S.T. Act. 7. The learned counsel for the petitioner relying upon the judgment of the Hon'ble High Court of Gujarat in Comsol Energy Private Limited v. State of Gujarat and the judgment of the Hon'ble High Court of Madras in Lenovo (India) Pvt. Ltd. v. Joint Commissioner of GST (Appeals-1), Chennai, would contend that the refund application was maintainable, on the ground that Section 54 of the GST Act, would not be applicable as this was payment of amounts under a mistake of law and in relation to a tax which was not permissible. Consequently, refund of tax cannot be denied on the ground of limitation under Section 54 of the GST Act. 8. Sri. P.S.P. Suresh Kumar, learned Standing Counsel appearing for respondents 3 to 6 would contend that the refund application was not maintainable on the ground that Section 54 of the GST Act has stipulated a period of limitation within which such an application has to be made and no further application can be made after the period of limitation. Apart from this, th....
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....declaration of law, it is deemed that all actions taken contrary to the declaration of law prior to its date of declaration are validated. This is done in the larger public interest. Therefore, the subordinate forums which are legally bound to apply the declaration of law made by this Court are also duty-bound to apply such dictum to cases which would arise in future only. In matters where decisions opposed to the said principle have been taken prior to such declaration of law cannot be interfered with on the basis of such declaration of law. In the instant case, both decisions of the DPC as well as the appointing authority being prior to the judgment in Sabharwal case, [(1995) 2 SCC 745 : 1995 SCC (L&S) 548 : (1995) 29 ATC 481] we are of the opinion that the Tribunal was in error in applying this decision. For this reason, these appeals succeed and are hereby allowed; setting aside the orders and directions made by the Tribunal in OAs Nos. 186 of 1994 and 961 of 1995." 13. The second ground, raised by Sri. P.S.P. Suresh Kumar, is that Section 54 of the CGST Act, which is extracted below, stipulates a limitation of 2 years and as such applications filed beyond this period ....
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....uding the documents referred to in section 33) as the applicant may furnish to establish that the amount of tax and interest, if any, paid on such tax or any other amount paid in relation to which such refund is claimed was collected from, or paid by, him and the incidence of such tax and interest had not been passed on to any other person: Provided that where the amount claimed as refund is less than two lakh rupees, it shall not be necessary for the applicant to furnish any documentary and other evidences but he may file a declaration, based on the documentary or other evidences available with him, certifying that the incidence of such tax and interest had not been passed on to any other person. (5) If, on receipt of any such application, the proper officer is satisfied that the whole or part of the amount claimed as refund is refundable, he may make an order accordingly and the amount so determined shall be credited to the Fund referred to in section 57. (6) Notwithstanding anything contained in sub-section (5), the proper officer may, in the case of any claim for refund on account of zero-rated supply of goods or services or both made by registered pe....
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....per officer may- (a) withhold payment of refund due until the said person has furnished the return or paid the tax, interest or penalty, as the case may be; (b) deduct from the refund due, any tax, interest, penalty, fee or any other amount which the taxable person is liable to pay but which remains unpaid under this Act or under the existing law. Explanation.-For the purposes of this sub-section, the expression 'specified date shall mean the last date for filing an appeal under this Act. (11) Where an order giving rise to a refund is the subject matter of an appeal or further proceedings or where any other proceedings under this Act is pending and the Commissioner is of the opinion that grant of such refund is likely to adversely affect the revenue in the said appeal or other proceedings on account of malfeasance or fraud committed, he may, after giving the taxable person an opportunity of being heard, withhold the refund till such time as he may determine. (12) Where a refund is withheld under sub-section (11), the taxable person shall, notwithstanding anything contained in section 56, be entitled to interest at such rate not ....
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.... to the receipt of such payment; or (ii) issue of invoice, where payment for the services had been received in advance prior to the date of issue of the invoice; (d) in case where the tax becomes refundable as a consequence of judgment, decree, order or direction of the Appellate Authority, Appellate Tribunal or any court, the date of communication of such judgment, decree, order or direction; (e) in the case of refund of unutilized input tax credit under clause (ii) of the first proviso to sub-section (3), the due date for furnishing of return under section 39 for the period in which such claim for refund arises; (f) in the case where tax is paid provisionally under this Act or the rules made there under, the date of adjustment of tax after the final assessment thereof; (g) in the case of a person, other than the supplier, the date of receipt of goods or services or both by such person; and (h) in any other case, the date of payment of tax. 14. The Hon'ble High Court of Gujarat had an occasion to consider a similar question, of whether an application for refund could be made, beyond the period specified under Section 54 of the ....
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....in the case of Gokul Agro Resources Ltd. v. Union of India (Special Civil Application No. 1758 of 2020, decided on 26.02.2020), wherein this Court directed the respondent to pass an appropriate order in the refund application preferred by the assessee without raising any technical issue, within a period of four weeks. The relevant paragraph of the finding of this Hon'ble Court is as under: "6 We may only say that since the Notification has been struck down as ultra vires, as a consequence of the same, the writ applicant seeks refund of the amount paid towards the IGST. However, for this purpose, the writ applicant will have to prefer an appropriate application addressed to the competent authority. If any such application is preferred for the refund of the amount, the authority concerned shall immediately look into the same and pass an appropriate order in accordance with law keeping in mind the decision of this Court rendered in the case of Mohit Minerals (supra). The competent authority shall not raise any technical issue with regard to the claim for refund of the IGST amount. Let this exercise be undertaken within a period of four weeks from the date of receipt of the wr....
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....e even beyond two years. The time-limit fixed under section 54(1) is directory in nature and it is not mandatory. Therefore, even if the application is filed beyond the period of two years, the legitimate claim of refund by the assessee cannot be denied in appropriate cases. 18. We would, with respect, leave this view open, for consideration, in a more appropriate case. 19. In the circumstances, the application for refund, cannot be treated to be beyond time and would have to be considered in the light of the judgment of the Hon'ble Supreme Court in the case of Union of India v. Mohit Minerals. 20. Accordingly, these writ petitions are allowed setting aside the orders of rejection as well as the common appeal order of the appellate authority, confirming the order of rejection by the original authority with a further direction to the original authority, viz., the 6th respondent-Assistant Commissioner of Tax, to reconsider the application of the petitioner, dated 30.03.2023, for refund of tax without going into the question of whether the said application is within time or not. The 6th respondent shall consider and pass orders, on the application of the pet....
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.... the petitioner is that the question of eligibility of refund cannot be decided by issuance of defect memos as the same requires adjudication in accordance with the procedure contemplated under law. It is further contended that the respondent authorities have to issue show cause notice in Form RFD-08 and allow the petitioner to file reply in Form RFD-09 and to pass a speaking order in Form RFD-06 as per the procedure contemplated under Rule 92 (3) of CGST Rules, 2017. He would further contend that in the absence of following the procedure under the said Rule, the impugned memos under challenge are liable to be interdicted by this Court. 5. A counter affidavit is filed by the respondents contending that as per Circular No. 125/44/2019-GST, dated 18.11.2019 issued by CBIC once a deficiency memo has been issued, the refund application would not be further processed. It is further contended that as per Section 54 of CGST Act, 2017, an application claiming refund of any tax and interest has to be made within a period of two (02) years from the relevant date in such form and manner as may be prescribed. He would further contend that as per Notification No. 13/2022-Central Taxes,....
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....s raised by the landlords and therefore it had filed application seeking to refund of the same. Further by impugned deficiency memos, the authorities have informed the petitioner that the applications are not fit for processing as the same were filed beyond the two (02) years as per Section 54 of CGST Act, 2017. 9. Further, the Hon'ble Gujarat High Court in the case of Comsol Energy Private Limited Vs. State of Gujarat had considered the applicability of period of limitation set out under Section 54 of CGST Act and held as under:- "7. Section 54 of the CGST Act is applicable only for claiming refund of any tax paid under the provisions of the CGST Act and/or the GGST Act. The amount collected by the Revenue without the authority of law is not considered as tax collected by them and, therefore, Section 54 is not applicable. In such circumstances, Section 17 of the Limitation Act is the appropriate provision for claiming the refund of the amount paid to the Revenue under mistake of law, which is as under: (1) Where, in the case of any suit or application for which a period of limitation is prescribed by this Act,- (a) the suit or application is bas....
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....er the refund application without going into the question, whether the said application is filed within time or not. 11. In view of the above reasons and following the above Judgment, the deficiency memos under challenge are set aside and the respondents are directed to consider the application of the petitioner for refund of tax without going into the question of limitation. Further, the respondents are directed to pass appropriate orders on the petitioner's application within a period of four (04) weeks from the date of receipt of copy of the order. 12. Accordingly, the writ petitions are allowed. No order as to costs. As a sequel, pending applications, if any shall stand closed." 10. In addition, respondent No.2 has issued a Circular dated 25.09.2021, which also reads as hereunder: Circular No. 162/18/2021-GST F.No.CBIC-20001/8/2021-GST Government of India Ministry of Finance Department of Revenue Central Board of Indirect Taxes and Customs GST Policy Wing *** New Delhi, dated the 25th September, 2021 To, The Principal Chief Commissioners/Chief Commissioners/ Principal Commissioners/Commiss....
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....held to be an inter-State supply, shall not be required to pay any interest on the amount of integrated tax payable." 3. Interruption of the term "subsequently held" 3.1 Doubts have been raised regarding the interpretation of the term "subsequently held" in the aforementioned sections, and whether refund claim under the said sections is available only if supply made by a taxpayer as inter-State or intra-State, is subsequently held by tax officers as intra-State and inter-State respectively, either on scrutiny/ assessment/ audit/ investigation, or as a result of any adjudication, appellate or any other proceeding or whether the refund under the said sections is also available when the inter-State or intra-State supply made by a taxpayer, is subsequently found by taxpayer himself as intra-State and inter-State respectively. 3.2 In this regard, it is clarified that the term "subsequently held" in section 77 of CGST Act, 2017 or under section 19 of IGST Act, 2017 covers both the cases where the inter-State or intra-State supply made by a taxpayer, is either subsequently found by taxpayer himself as intra-State or inter-State respectively or where the inter-St....
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....and state tax in respect of subsequently held intra-State supply, as the case may be. However, in cases, where the taxpayer has made the payment in the correct head before the date of issuance of notification No. 35/2021-Central Tax dated 24.09.2021, the refund application under section 77 of the CGST Act/ section 19 of the IGST Act can be filed before the expiry of two years from the date of issuance of the said notification. i.e. from 24.09.2021. 4.3 Application of sub-rule (1A) of rule 89 read with section 77 of the CGST Act / section 19 of the IGST Act is explained through following illustrations. A taxpayer "A" has issued the invoice dated 10.03.2018 charging CGST and SGST on a transaction and accordingly paid the applicable tax (CGST and SGST) in the return of March, 2018 tax period. The following scenarios are explained hereunder: Sl.No. Scenario Last date for filing the refund claim 1 Having realized on his own that the said transaction is an inter-State supply, "A" paid IGSSSST in respect of the said transaction on 10.05.2021 Since "A" has paid the tax in the correct head before issuance of notification No. 35/2021-Central Tax, dated 24.....
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....t through insurance of credit note under section 34 of the CGST Act in respect of the said transaction. 5. It is requested that suitable trade notices may be issued to publicize the contents of this circular. 6. Difficulty, if any, in implementation of this Circular may please be brought to the notice of the Board. Hindi version would follow." 11. Per contra, learned counsel for respondent Nos. 2 and 3 would reiterate the various contentions urged in the Statement of Objections and submits that there is no merit in these petitions and the same are liable to be dismissed. It is submitted that the provisions contained in Section 54 of the CGST Act and Rule 89(1A) of the CGST Rules, 2017 are mandatory and not directory and any refund application filed beyond the period of 2 years from when it becomes due was not maintainable and has been rightly rejected by respondent No. 3 by passing the impugned orders, which does not warrant interference by this Court in the present petitions. 12. I have given my anxious consideration to the rival submissions made and perused the material on record. 13. Before adverting to the rival contentions, it would be apposite to ex....
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....this sub-rule, be filed before the expiry of a period of two years from the date on which this sub-rule comes into force." 14. A plain reading of Section 77(1) of the CGST Act will clearly indicate that the taxpayer who pays tax to the Central Authority by oversight, inadvertence and erroneously, would be entitled to refund of the amount of taxes so paid in such manner and subject to such conditions as may be prescribed. 15. A similar provision exists in the IGST Act which relates to Inter-State supply and Section 19(1) of the IGST Act also contemplates that, if an Integrated Tax on a supply considered by the taxpayer to be an Inter-State supply is subsequently held to be an Inter-State supply, such taxpayer shall be granted refund of the amount of integrated tax so paid in such manner and subject to such conditions as may be prescribed. 16. Rule 89(1A) of the CGST Rules, 2017 stipulate that the refund claim under Section 77 of the CGST Act and Section 19 of the IGST Act would have to be made within a period of 2 years from the date of payment by filing an application in the prescribed format. 17. In this context, it is the specific contention of the petitioner that Rul....
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....the High Court of Madras and the High Court of Andhra Pradesh in the aforesaid judgments, Section 54 of the CGST Act and Rule 89(1A) of the CGST Rules, 2017 have been held to be directory and not mandatory. It is also significant to note that having regard to Article 265 of the Constitution of India, the respondent - Central GST authorities were not entitled to collect IGST form the petitioner, who was not liable to pay the same and consequently, upon the petitioner paying the same amount to the State GST authorities subsequently, the respondent-Centre was not entitled to retain the IGST and consequently, by applying the principles of restitution and unjust enrichment, the respondent - Centre was obligated to refund IGST back to the petitioner. 21. Under these circumstances, I am of the considered opinion that the impugned orders passed by respondent No. 3 holding that the refund claim is barred by limitation is contrary to facts and law and the same deserves to be set aside by holding that the refund application/claim of the petitioner is within time and is not barred by limitation. 22. The next question that arises for consideration is, as to the grant of refund in favour o....