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Tax Insights
10 December 2021
Madras High Court holds that benefit of Supreme Court’s suo motu order extending time limit for filing appeals or applications, on account of COVID-19, is applicable to refund applications as well
In brief
The Madras High Court held that the suo motu order of the Supreme Court extending the time limit for filing appeals, etc on account of COVID-19, is applicable to refund applications as well. The Court observed that refund applications made beyond the two-year period, as contemplated under section 54 of the Central Goods and Services Tax Act, 2017 (CGST Act), need to be entertained, and thus remanded the matter for considering the refund application de novo.
In detail
Facts
• Refund applications filed on 19 April 2021 under section 54 of the CGST Act for the months of June and August 2018 were rejected, because the refund applications were beyond the two-year period from the relevant date. That is, for applications pertaining to June 2018 and August 2018, the refunds elapsed in July 2020 and August 2020, respectively.
• Writ petitions were filed, inter alia, challenging the orders on the ground that the refund applications have the benefit of a suo motu order of the Supreme Court dated 27 April 2021.1
High Court’s decision
The High Court allowed the writ petitions and set aside the orders rejecting the refund claims. The Court placed reliance on the suo motu order of the Supreme Court and referred to paragraph 4(b) of the Central Board of Indirect Taxes and Customs Circular No. 157/13/2021-GST dated 20 July 2021; accordingly, it held that the Supreme Court’s order clearly ensures the benefit of the petitioner, and the refund applications made on 19 April 2021 need to be entertained.
With regard to the issue of examination of the refund application and entitlement to refund, the Court refrained from expressing any opinion as the orders did not record any reasons in writing. Accordingly, the Court remanded the matter for considering the refund application de novo and making an order, inter alia, in
1 Miscellaneous Application No. 665/2021 in SMW(c) No.3/2020
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accordance with rule 92 of the Central Goods and Services Tax Rules, 2017 and section 54(8)(b) of the CGST Act within six weeks.
The takeaways
The above decision assumes significance since the High Court has categorically held the controversial aspect of the applicability of the Supreme Court’s suo motu order extending the time limit for filing applications or appeals under the GST law to refund applications. This decision would be a great support to taxpayers who could not file the refund applications within the statutory time limit of two years but filed within the time period prescribed by the Supreme Court.
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