GST UPDATE NO. 103 Whether extension of time limit by Apex Court applies to refunds?

During the challenging times of Covid pandemic, government and Courts made every effort to support taxpayers in easy compliance with the statutory provisions of law by way of providing various relaxations with respect to time limits. The hon’ble Supreme Court also provided suo motto extension of time limit with respect to various compliances. However, recently, an issue that came up before the hon’ble Madras High Court in the case of M/S GNC INFRA LLP VERSUS ASSISTANT COMMISSIONER (CIRCLE) [W.P. No. 18165 & 18168 of 2021] was whether the suo motto extension order of Supreme Court applies to refund claims filed by the assessees or not. The analysis of this decision is the subject matter of discussion of our present GST update. In the above case a writ petition was filed by the petitioner against the rejection of refund claim. Writ petitioner submits that it may not be necessary to go into interpretation of the expression 'relevant date' qua CGST (Amendment) Act 2018 in the light of suo-moto orders of Hon'ble Supreme Court wherein all limitation periods were extended. The petitioner pleaded that if the benefit of suo-moto orders passed by the Hon'ble Supreme Court owing to Covid-19 situation is applied to the case on hand, the relevant date issue need not be gone into in the case on hand. The facts of the cases were the refund application dated 19.04.2021 has been made under Section 54 of C-GST Act. The refund sought for pertains to June of 2018 and August of 2018. The refund applications were rejected vide order dated 26.07.2021 on the grounds that refund applications should have been made within two years from the relevant date. Admittedly, the refund applications were made only on 19.04.2021 beyond the two years period. It is pertinent to mention that the decision passed by the Hon’ble Apex Court on suo moto basis regarding extension of time limit under various statues provided extension for all compliances including filing of any appeal, application or proceeding w.e.f. 15.03.2020 till 02.10.2021. Hence, the hon’ble Madras High Court held that refund applications were also covered by the said order of Apex Court. Moreover, reliance was also placed on the clarification given vide CBIC circular No.157/13/2021-GST wherein it was held that: - On the basis of the legal opinion, it is hereby clarified that various actions/compliances under GST can be broadly categorized as follows: (a) ........ (b) Quasi-Judicial proceedings by tax authorities: - The tax authorities can continue to hear and dispose of proceedings where they are performing the functions as quasi-judicial authority. This may interalia include disposal of application for refund application for revocation of cancellation of registration, adjudication proceedings of demand notices, etc. The hon’ble High court held that the extended period of limitation was equally applicable to the refund application filed under section Rule 92 of CGST Rules read with Section 54 (8) (b) of C-GST Act. Thus, the revenue was ordered to re-examine the refund application and process the same considering it as filed within the stipulated time period. The above decision has put an end to frivolous disputes raised by department and has provided the much needed relief to assessee.

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GST UPDATE NO. 103 Whether extension of time limit by Apex Court applies to refunds?

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