2026-VIL-263-GSTAT-PUN
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SGST Tribunal

GST - Refund of excess tax paid at a higher rate than the concessional rate applicable to supply to a Government entity - Relevant date for limitation under Section 54(1) of the CGST Act, 2017 - Appellant supplied goods under a composite contract to a Government department and inadvertently charged tax at a higher rate instead of the concessional rate - The mistake came to notice years later when the final settlement invoice applied the concessional rate – Rejection of refund solely on limitation, treating the supply as continuous supply of goods and the date of filing of the return as the relevant date - Appellant contended that in cases of excess payment under mistake the right to refund arises only on discovery of the mistake - Whether the date of filing of the return was rightly determined as the relevant date - HELD - Section 54(1) permits an application before expiry of two years from the relevant date, and the Explanation provides that in any other case the relevant date is the date of payment of tax. The tax having been reported and paid through the return, the relevant date is the date of filing that return - Section 54 does not provide for computing limitation from the date of discovery of a mistake in excess payment of tax. The contention cannot be accepted in the absence of a specific statutory provision - The relevant date was rightly determined - Rejection of refund claim filed beyond two years - Power of the proper officer and the Appellate Authority to sanction refund beyond limitation under Section 54(1) of the CGST Act, 2017 - Appellant contended that excess tax retained by the Department is tax collected without authority of law, so that limitation under Section 54 cannot bar the refund - Whether the refund claim is barred by limitation and whether the proper officer or the Appellate Authority can sanction refund beyond the prescribed period - HELD - The jurisdiction under Articles 226 and 32 does not by itself dispense with statutory restrictions, so it does not support an exception to the limitation under Section 54 - The decision of the Single Bench of the Hon'ble High Court at Karnataka holding the period directory was reversed by the Division Bench, which held that the two year period is mandatory as the Act confers no power to condone delay and the proper officer has no discretion to entertain a belated claim, and that the remedy of a person who misses the period lies under Article 226 with consequential extension of time for action under Sections 73 and 74. Applying that view, neither the proper officer nor the Appellate Authority under the CGST or State Act is empowered to sanction refund beyond the prescribed period, even where the tax paid exceeds the amount legally payable - The refund claim is barred by limitation and the order of the FAA is upheld and the appeal is dismissed - Section 54(8) of the CGST Act - Whether absence of unjust enrichment can overcome the bar of limitation on a refund claim - Appellant contended, relying on a Chartered Accountant certificate, that the incidence of the excess tax was not passed on to any person and that the exceptions in Section 54(8) entitled it to refund - Whether proof that incidence was not passed on can sustain a time-barred refund claim - HELD - Section 54(8) specifies the circumstances in which the refundable amount is paid to the applicant instead of being credited to the Consumer Welfare Fund, and thus distinguishes sanction of refund from the manner of its disbursal. It applies only where a refund is otherwise admissible, does not independently create a right to refund, and does not dispense with the conditions governing admissibility, including limitation under Section 54(1). Even if the Appellant establishes that the incidence was not passed on and that the claim is not hit by unjust enrichment, that circumstance cannot overcome the bar of limitation - The contention is rejected.
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