SALI P. MATHAI v. STATE TAX OFFICER

Introduction

• The petitioner filed a refund application on 05.04.2021 claiming a refund of ₹17,46,210 under Section 54 of the CGST/SGST Acts.
• The department issued a deficiency memo under Rule 90(3) on 19.04.2021, pointing out certain defects in the refund application.
• After rectifying the deficiencies, the petitioner filed a fresh refund application on 30.09.2021.
• The department rejected the second application on the ground that it was filed beyond the limitation period prescribed under Section 54(1) of the CGST Act.
• Aggrieved by the rejection, the petitioner approached the High Court.

Issue

Whether a refund application re-filed after curing deficiencies pursuant to a deficiency memo under Rule 90(3) can be rejected as time-barred by considering the date of the fresh application instead of the original refund application filed within the limitation period prescribed under Section 54 of the CGST Act?

Petitioner’s Contentions

• The petitioner contended that the original refund application filed on 05.04.2021 was within the statutory limitation prescribed under Section 54.
• Rule 90(3) merely requires rectification of deficiencies and filing of a fresh application but does not contemplate that the limitation should be reckoned from the date of the fresh application.
• The fresh application was only a continuation of the original application after curing procedural defects.
• Therefore, the refund application ought to have been treated as having been filed on the date of the original application.

Department’s Contentions

• The department argued that Rule 90(3) specifically requires filing of a fresh refund application after deficiencies are communicated.
• Since the second application was filed after the expiry of the limitation prescribed under Section 54(1), it was liable to be rejected as time-barred.
• The department further relied upon the relevant notification providing exclusion only for the period between filing of the original application and issuance of the deficiency memo.

High Court’s Findings

The High Court observed that: