Suraj Mangar Vs Assistant Commissioner of West Bengal State Tax and Others (Calcutta High Court)

Time limit of 60 days for processing GST refund application is statutory and mandatory: Calcutta High courtIn case of Suraj Mangar Vs. The Assistant Commissioner of West Bengal State Tax and Others, Calcutta high court held that The statutory time limit of 60 days for processing refund applications under Section 54(7) of the West Bengal Goods and Services Tax Act, 2017 is mandatory, not merely directory. If authorities fail to adhere to this deadline, any resulting order or refusal of refund is rendered invalid. The court further clarified that once an application is acknowledged as complete, authorities cannot later allege deficiencies or introduce extraneous grounds to deny a refund.Fact of the case:- Petitioner filed the application for refund under GST, Acknowledgment for refund was issued after 15 days from the date of application. SCN was issued date of personal hearing set after 60 days from the date of Application and later application got rejected.Being aggrieved by the order, Appeal was filed to the Appellate Authority, however Appellate Authority confirmed the order passed by adjudicating authority.Observation by courtThe governing provision in the present case is Section 54 of the Act. Sub-section (1) of the same contemplates an application by any person claiming refund of any tax and interest, if any, paid on such tax or any other amount paid by him before the expiry of two years before the relevant date, in such form and manner as may be prescribed. Appellant has also duly filed such application in the due time limit. Sec 54(5) read with 54(7) requires issuance of order within 60 days from the date of receipt of the application.there are three stages involved – first, a scrutiny as to completeness of the application is to be done by the PO and an acknowledgment issued, if satisfied, which entire process is to be completed within 15 days of the application. Secondly, the PO, if for recorded reasons, is satisfied that the claim of refund is not admissible, wholly or in part, a show cause notice is required to be issued calling for a reply. 15 days’ time has to be given for the applicant to file such reply. Thus, in total, the time taken in scrutiny as to completeness and acknowledgment (15 days) and the time between the Show Cause Notice and the date of reply (15 days) comes to 30 days and leaves 30 more days for the order as per stipulation of to be passed, keeping in view the outer limit of 60 days.it is well-settled that taxing and penal statutes are to by interpreted by applying the Strict Rule of interpretation of statutes. Since the GST Act is a taxing statute, the above rule applies and the timelines are to be deemed mandatory. Therefore the statutory time limit of 60 days as stipulated in Section 54(7) of the Act is mandatory and non-compliance of the same vitiates any order passed in violation thereof under Section 54(5) of the Act.the Show Cause Notice was issued 29 days after the issuance of the acknowledgement, which is clearly contrary to the intention of the statute and the Rules framed thereunder.The limited charter of the GST Authorities is merely to ascertain whether such duties and charges have been duly payable, which is amply proved in the instant case by the Customs documents issued by the Indian Customs Authorities to the appellant at the time when the appellant’s exported goods crossed the Indian border. However, the PO went way beyond his jurisdiction in seeking to ascertain whether the goods were actually received by the importer, which is a completely extraneous consideration. By reading the Rule 89(2)(b) there was no scope at all for the respondent-Authorities to refuse the refund.Conclusion by Court.Court allowed the writ filed by petitioner, set aside the order passed by the Appellate Authority and the order of rejection of the Proper Officer, and also , directed to refund the entire amount claimed by the appellant at the earliest, positively within 30 days from date, along with interest as contemplated in Section 56 of the West Bengal Goods and Services Tax Act, 2017.