2026-VIL-324-GSTAT-DEL
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  2. 2026-VIL-324-GSTAT-DEL

SGST Tribunal

GST - Maintainability of departmental appeal before the Appellate Tribunal - Monetary limit prescribed by Circular No. 207/1/2024-GST dated 26.06.2024 and its exceptions - Respondent claimed refund of accumulated Input Tax Credit under Section 54, which was rejected by the adjudicating authority solely on limitation and allowed by the appellate authority - Appellant-Department filed the appeal under Section 112(3) on the direction of the Principal Commissioner - Respondent contended that the disputed tax was below the monetary limit, that none of the exceptions applied, and that the exception for refunds was confined to interpretation of the substantive law of entitlement - Whether the appeal is liable to be dismissed in limine as not maintainable on account of the monetary limit - HELD - The right to file the appeal flows from Section 112(3) of the Act, and the review order was passed in exercise of that power. The Circular itself provides that the monetary limits do not apply where the matter relates to refunds, and the dispute being one relating to refund falls squarely within that exclusion. The contention that the exception is confined to the substantive law of entitlement finds no support in the language of the Circular, which speaks of a matter related to refunds without any qualification. The appeal also raises questions of true construction of Section 54(1), Notification No. 13/2022, the proviso to Rule 90(3) and the effect of a deficiency memo, which would govern numerous other cases. Section 120(1) permits instructions on monetary limits only to regulate the discretion of officers and does not curtail the jurisdiction of the Tribunal - The objection on maintainability is rejected and the appeal is held maintainable - Computation of limitation for refund of exporter during the COVID exclusion period - Limitation under Section 54(1) read with Notification No. 13/2022-Central Tax and the judgment of the Hon'ble Supreme Court in the suo motu proceedings on extension of limitation - Respondent exported goods by sea, and the relevant date was taken as the date of Let Export Order on the shipping bills, which fell within the excluded window from 01.03.2020 to 28.02.2022. The first refund application was filed on 22.02.2024. The appellate authority excluded only the days running from the relevant date to the end of the window and left a residual delay of twelve days for the second application - Whether the first refund application was filed within the period of limitation, and whether the computation of the appellate authority is sustainable - HELD - The limitation question is a pure question of law on admitted facts, and the Tribunal is bound to reckon limitation correctly irrespective of the manner of computation adopted by the parties or the authorities below. The direction of the Hon'ble Supreme Court granting ninety days from 01.03.2022 applies only where limitation would have expired within the exclusion window. Where the relevant date itself falls within the window and the two-year period had not started running, the entire period up to 28.02.2022 stands excluded, and the balance period becomes available from 01.03.2022. The day of the relevant date is excluded under Section 9 of the General Clauses Act, 1897. The full period of two years is therefore reckoned from 01.03.2022, and the last date for filing the refund application is 29.02.2024. The first application filed on 22.02.2024 is within time on the computation of the appellate authority, on the computation of the Hon'ble High Court of Andhra Pradesh, and on the computation adopted by the Tribunal – The first refund application is held to be filed within the extended period of limitation - Effect of deficiency memo and relation back of rectified refund application - Effect of a deficiency memo on limitation - Proviso to Rule 90(3) of the CGST Rules, 2017 and paragraph 12 of Circular No. 125/44/2019-GST - Respondent filed the first refund application, which was followed by a deficiency memo stating only that supporting documents were incomplete - The Appellant-Department contended that the second application was a fresh application with a residual delay, that only the period up to the deficiency memo could be excluded, and that the Circular was binding - Whether the second refund application relates back to the first application, and what effect the deficiency memo has on limitation - HELD - A bona fide rectification of deficiencies following a deficiency memo does not give rise to a fresh cause of action or a fresh limitation period, and relates back to the original application as its continuation. The decisions of the Hon'ble High Court of Delhi, which are binding on the Tribunal within its territorial jurisdiction, hold that an application not deficient in material particulars cannot be treated as non est and that limitation stops on its filing - The doctrine of relation back operates only where the original application was itself filed within the extended period of limitation, and that condition was satisfied. The deficiency memo did not identify any missing document, no finding was recorded that the first application was deficient in any material particular, and the Appellant did not point out any such particular even before the Tribunal. A taxpayer who responds promptly to a deficiency memo cannot be penalised for diligence. The residual delay arises only if the second application is treated as fresh, and as it is a continuation of the first, no question of delay arises - The issue is answered in favour of the Respondent-assessee - Whether the two-year period under Section 54(1) is mandatory or directory - Appellate authority relied on the decisions of the Hon'ble High Court of Madras holding that the period is directory and that delay can be condoned for reasons shown - Appellant-Department contended that those decisions were not accepted and were under challenge in pending writ appeals - Whether the two-year period under Section 54(1) is mandatory or merely directory - HELD - Limitation periods under special fiscal statutes are to be strictly construed and are not ordinarily susceptible to relaxation on equitable grounds, however marginal the delay. The Hon'ble Supreme Court has held that a claim for refund must be made within the four corners of the statute, that where a special statute prescribes its own limitation without a power to condone delay, neither the authorities nor the High Court can extend it, and that a refund under GST law is a statutory concession to be claimed strictly in accordance with the prescribed conditions - No provision of the Act confers on the proper officer or the appellate authority a power to condone delay in filing a refund application, and the Hon'ble High Court of Delhi has also expressed reservation about treating the period as directory. The Tribunal declined to adopt the view of the Hon'ble High Court of Madras - The error of the appellate authority does not affect the outcome, as the refund claim was filed within time and no delay required condonation - The period is held to be mandatory and not directory, the finding does not alter the result. The appeal of the Department is dismissed
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