Bombay High Court Allows Second GST Refund Claim for Omitted Invoice

The Bombay High Court has held that a GST refund claim cannot be rejected merely because the taxpayer had earlier filed another refund application covering the same tax period. The Court ruled that Section 54(1) of the CGST Act does not bar the filing of a second refund application, particularly where an eligible claim was inadvertently omitted from the earlier application and the subsequent claim is filed within the prescribed limitation period.

The dispute arose after Valmet Flow Control Pvt. Ltd. filed a refund application seeking a refund of Rs 1.10 crore in relation to an export invoice for which foreign remittance had been received in August 2022. Although the claim was filed within the two-year limitation prescribed under Section 54(1) of the CGST Act, the department rejected it on the ground that the taxpayer had already filed and obtained a refund under an earlier application covering the period July 2022 to September 2022. According to the department, a separate refund application for August 2022 was not maintainable as that period had already formed part of the earlier refund claim.

Before the High Court, the petitioner contended that the invoice in question had been inadvertently omitted from the earlier refund application and that the CGST Act contained no prohibition against filing a subsequent refund claim within the statutory limitation period. The petitioner also relied on judicial precedents which recognized that substantive refund benefits cannot be denied merely because of procedural lapses or inadvertent mistakes.

The Court observed that Section 54(1) of the CGST Act does not contain any restriction on filing more than one refund application and, in the absence of such a statutory bar, a legitimate refund claim cannot be rejected solely because an earlier refund application had been filed for the same broader period.

The High Court noted that the department itself did not dispute that the refund application had been filed within the prescribed limitation period. It further held that technical objections of the nature raised in the impugned order could not defeat a taxpayer’s substantive right to seek a refund. The Bench emphasised that principles akin to res judicata have no application in such refund proceedings and that reading an artificial restriction into Section 54 would defeat the object of the provision.

The Court further held that where a refund claim is otherwise legally maintainable and filed within time, an inadvertent omission in an earlier application cannot create an illusory bar against claiming the benefit through a subsequent application.

Referring to the Gujarat High Court’s decision in Shree Renuka Sugars Ltd. and its own earlier ruling in Rika Global Impex Ltd., the Court observed that refund claims should not be denied merely on technical grounds when the substantive conditions for grant of refund are satisfied. It also stressed the importance of maintaining uniformity in the interpretation of central tax statutes across High Courts.

Thus, the High Court set aside the refund rejection order dated April 3, 2025 and restored the refund application to the file of the Assistant Commissioner, CGST, for fresh adjudication in accordance with law after granting an opportunity of hearing to the petitioner. The Court kept all contentions of the parties, including the petitioner’s claim for interest, open for consideration.

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