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SGST High Court Cases

GST – Refund of Pre-deposit – Period of Limitation under Section 54 of the CGST Act, 2017, mandatory or directory - Denial the refund of the pre-deposit amount made under Section 107(6)(b) of the CGST Act on the ground of Limitation - Whether the application for refund made beyond a period of two years is time-barred - HELD – Once the refund is by way of statutory exercise, the same cannot be retained neither by the State, nor by the Centre, that too by taking aid of a provision which on the face of it is directory, inasmuch as, the language couched in Section 54 is “may make an application before the expiry of 2 years from the relevant date” - The word ‘may’ has been interpreted by the Hon’ble Apex Court in numerous cases and the Hon’ble Apex Court has opined that the word ‘may’ as would appear in different statutes, is normally directory in nature and not mandatory - the refund of statutory pre-deposit is a right vested on an assessee after an appeal is allowed in its favour and the pre-deposit made by an assessee cannot be forfeited taking aid of section 54 of the CGST Act and the same cannot be the intent of the CGST Act, 2017 – Further, it is not even a case of the Dept that there is any unjust enrichment on the part of the assessee, inasmuch as, the pre-deposit has been made from the own pocket by an assessee - by restricting the refund in reading the word ‘may’ as ‘shall’ would be unreasonable and would otherwise be arbitrary and in conflict with the Limitation Act, 1963 - When the Constitution of India restricts levy of any tax without authority of law, the retention of the same on the ground of statutory restriction, which is in conflict with the Limitation Act, appears to be being misread by the authorities of the GST Department - the rejection order by way of Deficiency Memo is quashed and set-aside - the respondent is directed to process the refund application of the petitioner within a period of six weeks. The petitioner shall also be entitled to interest in terms of Section 54 – the writ petition is allowed
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