2 Years Time Limit for making GST refund application directory in nature: HC condones the same

The Madras High Court in the matter of ARS Energy Private Limited Vs. Additional Commissioner, condoned 2 Years Time Limit for making GST refund application directory in nature.

Relevant Text of the Judgment:

9. In the present case, admittedly, the petitioner is entitled for refund of IGST, which was paid on the Ocean Freight Charges as held by the Hon’ble Apex Court in Mohit Minerals case (referred supra). Further, it is pertinent to note that since the Ocean Freight Charges was paid by the exporter, definitely the same would have been included in the cost of the goods. Thereafter, the petitioner, being an importer, had also paid IGST. In such view of the matter, the petitioner has paid double IGST on the Ocean Freight Charges alone. Hence, the Hon’ble Apex Court had held that no IGST can be collected on the Ocean Freight Charges from the importers and the said law laid down by the Hon’ble Apex Court will apply to the present case as well.

10. When the petitioner filed their refund application before the respondents, the said law was not laid down by the Hon’ble Apex Court. Hence, the refund application was rejected by the respondent. It also appears that the refund application was also rejected on the aspect of limitation.

11. Recently, this Court had passed an order in W.P.No.23604 of 2022 dated 06.11.2023 [M/s. Lenovo (India) Pvt. Ltd., vs. The Joint Commissioner of GST (Appeals-1) and others], wherein it has been held that the fixation of limitation for making refund application is only directory in nature and the same is not mandatory. Accordingly, the limitation of 2 years, which was provided under Section 54(1) of the Goods and Services Tax Act, 2017, is directory in nature. In such case, if any reasons were provided for delay in filing the refund application, the same shall be considered and the said delay shall be condoned by the respondent.

12. Therefore, considering the law laid down by the Hon’ble Apex Court in Mohit Minerals case (referred supra) and this Court in W.P.No.23604 of 2022, this Court is of the view that the impugned order dated 24.09.2023 is liable to be set aside. Accordingly, this Court passes the following order:

(i) The impugned order dated 24.09.2023 is set aside;

(ii) While setting aside the said impugned order, this Court remits the matter back to the 2nd respondent for reconsideration.

(iii) The 2nd respondent is directed to consider the refund application as per the law laid down by the Hon’ble Apex Court and this Court as discussed above and pass appropriate orders after providing an opportunity of personal hearing to the petitioner.

(iv) It is left open to the both the parties to raise all the other issues before the Authority concerned and the respondents are directed to consider all the issues on its own merits and in accordance with law;

(v) All the above exercises shall be completed within a period of three months from the date of receipt of copy of this order.

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