Limitation To Claim GST Refund Begins From Date Of Correct Tax Payment: Patna High Court

Justices Rajeev Ranjan Prasad and Shailendra Singh after reading Section 77 of the CGST Act, 2017 read with Section 19 of the IGST Act opined that the relevant date for counting the period of limitation would start from the date when the assessee had deposited the tax under IGST Act.

It is the case of the petitioner/assessee that for the financial year 2017-18, the assessee filed his all GSTR-01, GSTR-3B & GSTR-09 and paid all due taxes according to the returns. 

The Audit Report prepared under Section 65(6) in GST ADT-02 Form observed that the assessee short paid Integrated Goods and Services Tax identifying certain transactions to be Inter-State transactions which the assessee had treated as Intra-State transactions under CGST/SGST Act, 2017 and had paid the taxes.

The assessee submitted that department, even though found that the assessee would be entitled for the refund, rejected the refund application relying upon Section 54 of the BGST Act, 2017 on the ground of limitation.

The State argued that since the tax sought to be refunded has been paid in January 2018, the refund application was filed by the assessee on 17.01.2024, therefore, it was delayed by almost four years.

The bench opined that the department seems to have committed an error in taking a view that the period of two years would be counted from the month of January 2018 when the amount on account of SGST and CGST were deposited with the Returns of the Financial Year 2017-18. 

If the order of the department is allowed to remain in existence, it would amount to rendering Section 77 of the BGST/CGST Act, 2017 read with Section 19 of the IGST Act and clarificatory Circular No. 162/18/2021-GST redundant, added the bench.

The bench stated that the assessee is entitled to get refund of the amount paid on account of SGST and CGST in January, 2018, together with interest at the rate of 6% per annum from a date which would be beginning after three months from the date of filing of the application for refund, till the date of payment.

In view of the above, the bench allowed the petition. 

Case Title: M/s Sai Steel v. The State of Bihar

Case Number: Civil Writ Jurisdiction Case No.13163 of 2024

Counsel for Petitioner/Assessee: Bijay Kumar Gupta and Manish Kumar

Counsel for Respondent/Department: Vikash Kumar