2026-VIL-284-KAR
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SGST High Court Cases

GST – Period of Limitation under Section 54 of the CGST Act, 2017 - Refund claim of GST paid under wrong head, Payment of IGST instead of CGST+SGST, Rejection of refund on ground of Limitation - Respondent-assessee had initially paid IGST treating the services as "export of services". Later, it paid CGST and SGST treating the transaction as an intra-State supply. The assessee filed a refund claim under Section 54 of the CGST Act, 2017 for the IGST paid, which was rejected as being filed beyond the prescribed period of two years – Revenue in appeal against the impugned orders passed by the Ld. Single Judge holding that the refund application of the petitioner is within time and is not barred by limitation – HELD - In the absence of any enabling power either to condone the delay or to treat the period of two years as directory, the only possible interpretation of Section 54 is that the period prescribed therein is mandatory. The mere presence of the word “may”, as contended, cannot always be construed as directory; the expression must take its colour as either directory or mandatory depending upon the context in which it is used - The period of two years prescribed under Section 54 of the CGST Act for filing a refund claim is mandatory. However, merely because the provision under Section 54 is held to be mandatory, it cannot be said that the jurisdiction vested in this Court under Article 226 stands excluded - The bar imposed under Section 54 operates only in relation to the proper officer entertaining a refund claim after the expiry of two years. The said bar cannot be construed as being applicable to the Court while exercising its jurisdiction under Article 226 of the Constitution of India - Once the delay is condoned, the refund claim shall be treated as having been filed within the prescribed period of two years, enabling all consequential benefits to the claimant as well as the exercise of appropriate powers by the proper officer under the Act - The present case is a fit case for condonation of delay. Accordingly, the delay in filing the application under Section 54 of the Act is condoned. The application under Section 54 seeking refund is directed to be considered in accordance with law - Writ appeals are partly allowed - Section 54 enables a claim for refund but prescribes a limitation of two years. In cases of payment of tax on two counts, where the statute contemplates only one payment, Section 77 of the Act enables refund without prescribing any limitation. When Section 77 does not impose any time limit for claiming refund, rejection of such a refund claim solely on the basis of Section 54 would indicate that the scheme of the Act is not complete - where the statutory scheme does not provide an adequate remedy, the exercise of writ jurisdiction under Article 226 of the Constitution of India would be permissible - The condonation of delay ordered by the Court shall be subject to the condition that corresponding extension of time is granted in favour of the proper officer to invoke other applicable provisions, including Sections 73 and 74 of the Act, as may be necessary. If such other remedies were otherwise available had the refund claim been filed within two years under Section 54 of the Act, the same shall continue to remain available.
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