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No Limitation Period U/S 54(1) of CGST Act on Tax Collected Over Nil GST Authority of Law

Delhi HC's Order for Delhi Metro Rail Corporation Limited

Hon’ble Delhi High Court for the case of Delhi Metro Rail Corporation Limited vs. The Additional Commissioner, Central Goods and Services Tax Appeals and Others [W.P. (C) 6793/2023 dated September 18, 2023] ruled that the limitation duration of two years under Section 54(1) of the Central Goods and Service Tax Act, 2017 (“the CGST Act”) for filing an application for a refund of tax, could not be invoked when the Revenue Department collected the tax without any authority of law. Therefore the Writ Petition was permitted, and the Revenue Department was instructed to process the claim for Petitioners refund.

Details:

The Delhi Metro Rail Corporation referred to as “the Petitioner,” was commissioned by the Surat Municipal Corporation, referred to as “the Service Recipient,” to prepare a Project Report, referred to as “the Report,” for the development of the Metro Rail Project in Surat, Gujarat. The Petitioner provided their services for the preparation of the Report and issued an invoice on August 11, 2017, amounting to Rs. 19,04,520/-, which included Goods and Service Tax (GST) of Rs. 2,90,520/-.

The Service Recipient made a payment of Rs. 16,14,000/- to the Petitioner, excluding GST. Subsequently, the Petitioner deposited the GST amount of Rs. 2,90,520/- to fulfil the compliance requirements under Form GSTR-3B. Later, the Service Recipient, citing Notification No.12/2017 – Central Tax (Rate) dated June 28, 2017, informed the Petitioner that they were not obligated to levy GST on the services provided.

The Petitioner submitted a refund application (in form GST RFD-01) on May 2, 2022, to the Revenue Department, referred to as “the Respondent,” to claim a refund. However, the application was rejected through a Refund Rejection Order, referred to as “the Rejection Order,” dated July 4, 2022. The reason cited for rejection was that the refund application was filed after the expiration of two years from the relevant date, rendering it ineligible due to the limitation period.

Disagreed from that the applicant filed a petition against the rejection order to the Respondent for claiming the GST refund. But, the Respondent, vide Order-in-Appeal No.241/2022-2023 dated February 24, 2023 (“the Impugned Order”) denied the Petitioner’s appeal for the claim of the refund.

The Petitioner dissatisfied with the impugned order filed a writ petition to the Hon’ble Delhi High Court.

Issue:

Can the Limitation Period be Applied Under Section 54(1) of the CGST Act When Tax is Collected Without Legal Authority?

Had:

The Hon’ble Delhi High Court in W.P. (C) 6793/2023 held as under:

Applicable Condition Under GST Section 54(1) of CGST Act

In accordance with GST Section 54(1) of the tax refund, any person who wants to claim a tax refund and interest paid on it or any other amount paid by him can do so within two years of the appropriate date.

Case TitleDelhi Metro Rail Corporation Ltd Vs the Additional Commissioner
CitationW.P.(C) 6793/2023
Date18.09.2023
For PetitionerMr Adarsh Tripathi, Mr Vikram Singh Baid and Mr Ajitesh Garg
For RespondentMr Atul Tripathi, SSC with Mr V.K. Attri
Delhi High CourtRead Order
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