HC Permits Second GST Refund; No Statutory Bar Under Section 54

The petitioner, Valmet Flow Control Pvt. Ltd., had filed a GST refund application for the period July to September 2022, which was duly processed and sanctioned. However, one invoice pertaining to August 2022 was inadvertently omitted from the original claim. To rectify this omission, the petitioner filed a second refund application within the limitation period prescribed under Section 54(1) of the CGST Act. The department rejected the claim on the ground that a refund application for the same period had already been filed and processed, and therefore a second application was not maintainable. Aggrieved, the petitioner approached the High Court.

Issue Before Court: Whether a second GST refund claim can be denied solely because an earlier claim for the same period was filed and processed.

HC Decided: The High Court allowed the petition and set aside the rejection order. The High Court’s ruling in this case is a significant win for high-performing businesses, essentially telling the tax department that “being too good at your job” isn’t a crime.

The Court made it clear that a high profit margin, on its own, isn’t proof of a tax scam. To slash a company’s deductions under Section 80-IA(10), the government can’t just point at a balance sheet and say, “That looks like too much money.” They need “clear and cogent evidence” that there was an actual, deliberate plot to shift profits around. The High Court set aside the restriction on the deduction, reminding the authorities that statutory tax breaks are meant to be a reward for successful exports, not a trap for those who happen to be highly profitable.

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