The Jharkhand High Court has held that the GST department cannot deny pre-deposit refund citing limitation.
The bench of Chief Justice M.S. Ramachandra Rao and Justice Deepak Roshan has observed that when the Constitution of India restricts levy of any tax without authority of law, the retention of the same on the ground of statutory restriction, which is in conflict with the Limitation Act, appears to be being misread by the authorities of the GST Department.
The petitioner/assessee is a registered dealer under the Goods & Services Tax Act and is carrying out business of loading, unloading of Coal and transportation of coal loaded into tipper. In the month of January 2021, alleging mismatch in GSTR-1 and GSTR-3B for the month of September 2019, Show Cause Notice under Section 74 of the JGST Act, 2017 was issued and ex- parte order was passed vide order dated 31.08.2021, imposing liability of Rs. 16,90,442, which inter alia included tax, interest and penalty.
The petitioner preferred an appeal within time making a statutory pre-deposit of the 10% of the disputed tax amount under Section 107(6)(b) of the Act, in order to maintain the appeal.
After hearing the petitioner and scrutinizing the documents, the appeal was allowed on 09.02.2022 and Form GST APL-04 dated 10.02.2022 was issued.
The petitioner made an application for refund of the pre-deposit amount on 11.09.2024, which by virtue of a Deficiency Memo dated 06.11.2024 was held to be beyond the period prescribed under section 54(1) of the Goods and Services Tax Act.
The issue raised was whether the application for refund made beyond a period of 2 years should be entertained or not or if it is time barred.
The court held that Article 137 of the Limitation Act, 1963, provides for 3 years limitation period for filing a Money Suit and if section 54 and the word ‘may’ is given effect to as ‘mandatory’, then in that event an assessee is otherwise also barred from filing a Money Suit, which cannot be the intent of the Act.
The court quashed the action of the respondents in rejecting the refund application considering it as time barred and has no legs to stand in law.
Case Details
Case Title: M/s. BLA Infrastructure Private Limited Versus State of Jharkhand
Case No.: W.P.(T) No. 6527 of 2024
Date: 30/01/2025
Counsel For Petitioner: Nitin Kumar Pasari
Counsel For Respondent: Mohan Kr. Dubey
