2026-VIL-313-GSTAT-KOL
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SGST Tribunal

GST - Refund of pre-deposit made for filing an appeal against a service tax demand - Applicability of the two-year limitation under Section 54(1) of the CGST Act, 2017 - Respondent, unable to pay the statutory pre-deposit through the legacy portal owing to login issues, paid it through Form DRC-03 from the electronic cash ledger, later paid it again through the proper channel, and after the service tax demand was set aside, claimed refund of the amount paid through DRC-03 - Refund claim was rejected as time barred since it was filed more than two years from the date of payment - FAA allowed the refund and Revenue appealed - Whether the refund of the pre-deposit paid through DRC-03 is barred by limitation under Section 54 - HELD - Section 54 of the CGST Act is applicable only for claiming refund of tax paid under the CGST Act or the IGST Act. The amount paid through DRC-03 was a pre-deposit payable for preferring an appeal against a service tax demand and not tax under the GST law. The payment having been made under mistake of law, the statutory time limit under Section 54 does not apply, the claim is outside the purview of the CGST Act, and the general provisions of the Limitation Act apply. This follows the High Court rulings holding that Section 54 is not applicable to amounts collected without authority of law, and that refund of duty or service tax paid under mistake cannot be barred by the special statutory limitation - The refund claim is not barred by limitation. The Revenue appeal is dismissed - Applicability of the doctrine of unjust enrichment to refund of pre-deposit made for preferring an appeal - Respondent had paid the pre-deposit from its own funds without passing on the burden to any customer - Whether the principle of unjust enrichment applies to refund of such pre-deposit - HELD - Following the Bombay High Court, a deposit made as a pre-deposit for availing the right of appeal is not a payment of duty, such amount is bound to be refunded when the appeal is allowed with consequential relief, and the doctrine of unjust enrichment is inapplicable - The order of the FAA allowing the refund of the pre-deposit paid through Form DRC-03 is upheld and the appeal of the Revenue is rejected.
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