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2025 (6) TMI 106 - HC - GSTRefund of unutilized Input Tax Credit (ITC) - claim pertaining to periods prior to the effective date of N/N. 09/2022-Central Tax (dated 13.07.2022 effective 18.07.2022) filed after the said effective date but within the statutory limitation period - HELD THAT - In the case of Patanjali Foods (Supra) this Court while dealing with the Notification No.1 3/2022 Central Tax dated 05.07.2022 and Circular No. 181/13/2022-GST dated 10.11.2022 after relying upon the ratio in the case of Ascent Meditech Ltd. Vs. Union of India 2025 (3) TMI 367 - GUJARAT HIGH COURT had struck down paragraph No. 2(2) of the Circular No. 181/13/2022-GST dated 10.11.2022 by which two classes of the Refund Applications i.e. whether filed before 13.07.2022 or filed after 13.07.2022 was sought to be created by the Respondent-Department. In the present case the Petitioner had filed his Refund Application on 07.011.2022 which was well within the period of limitation under Section 54 (1) of the Act as will be evident from the Chart at Paragraph No. 3.3 hereinabove. In such view of the matter following the decision of Patanjali Foods since the Refund Applications in question were filed within the period of limitation the same could not be rejected by placing reliance on Circular No.181/13/2022-GST dated 10.11.2022. Conclusion - The refund claim filed by the Petitioner on 07.11.2022 for periods prior to 18.07.2022 is maintainable as it was within the statutory limitation period. The impugned rejection Order is clearly erroneous and hence is hereby quashed and set aside - Petition allowed.
1. ISSUES PRESENTED and CONSIDERED
The core legal questions considered by the Court in this matter are:
2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Maintainability of Refund Claims Filed Post Effective Date of Notification No. 09/2022-Central Tax for Periods Prior to Such Date Relevant Legal Framework and Precedents: Section 54 of the CGST Act governs refund of tax, including unutilized ITC. Notification No. 09/2022-Central Tax (dated 13.07.2022, effective 18.07.2022) amended the refund provisions prospectively. The Petitioner relied on the extended limitation period provided under Notification No. 13/2022-Central Tax and Section 54(1) for filing refund claims. The decision in Patanjali Foods Ltd. v. Union of India and Priyanka Refineries Pvt. Ltd. v. Deputy Commissioner ST were cited as authoritative precedents supporting the Petitioner's position. Court's Interpretation and Reasoning: The Court recognized that the Petitioner's refund application dated 07.11.2022 was filed within the prescribed limitation period as extended by Notification No. 13/2022-Central Tax. The Court observed that Notification No. 09/2022-Central Tax was prospective and did not explicitly bar refund claims for periods prior to its effective date. The Court relied on the ratio in Patanjali Foods (Supra), which struck down similar restrictions imposed by Circular No. 181/13/2022-GST that differentiated refund claims based on the date of filing, rather than the tax period to which the claim related. Key Evidence and Findings: The Petitioner produced a tabulated chart showing the relevant tax periods, corresponding dates, and limitation deadlines, demonstrating compliance with the statutory limitation. The acknowledgment of the refund application in Form GST RFD-02 confirmed the application was complete and eligible for consideration. Application of Law to Facts: The Court applied the principle that a statutory right to refund, once accrued and within limitation, cannot be denied by subsequent administrative circulars or notifications unless explicitly provided by law. Since the refund claim related to tax periods prior to 18.07.2022 and was filed within limitation, the claim was maintainable. Treatment of Competing Arguments: The Respondent contended that Circular No. 181/13/2022-GST and Notification No. 09/2022-Central Tax barred the refund claim because it was filed after 18.07.2022. The Court rejected this contention, holding that the Circular cannot impose retrospective effect or override the statutory provisions. The Respondent's reliance on the Circular was deemed legally improper. Conclusions: The refund claim filed by the Petitioner for periods prior to 18.07.2022 is maintainable even if filed after that date, provided it is within the statutory limitation period. Issue 2: Legality and Binding Effect of Circular No. 181/13/2022-GST Dated 10.11.2022 Relevant Legal Framework and Precedents: Circulars issued by tax authorities serve as clarifications but cannot override or amend statutory provisions. The Court referred to the Patanjali Foods decision which invalidated paragraph 2(2) of the Circular No. 181/13/2022-GST for creating an impermissible classification of refund applications based on filing dates. Court's Interpretation and Reasoning: The Court found that the Circular sought to give retrospective effect to Notification No. 09/2022-Central Tax, which was not intended by the latter. It held that Circulars are binding on the revenue but not on taxpayers and cannot impose conditions contrary to the Act or Notifications. The Circular's attempt to deny refund claims filed after 18.07.2022 for periods prior to that date was held to be beyond the scope of the law. Key Evidence and Findings: The impugned rejection order relied heavily on the Circular to deny the Petitioner's claim. The Court identified this reliance as erroneous, given the Circular's illegality as established in precedent. Application of Law to Facts: The Court applied the principle that administrative instructions cannot curtail statutory rights or extend limitations retrospectively. The Circular's retrospective application was inconsistent with the CGST Act and Notifications. Treatment of Competing Arguments: The Respondent argued the Circular clarified the Notification and was binding on the revenue. The Court acknowledged the binding nature on revenue but emphasized that the Circular cannot impose illegal restrictions or retrospective effects. Conclusions: The Circular No. 181/13/2022-GST cannot legally bar refund claims filed within limitation for periods prior to 18.07.2022, and its retrospective application is invalid. 3. SIGNIFICANT HOLDINGS The Court's crucial legal reasoning is encapsulated in the following verbatim excerpts from the impugned order and judgment:
The Court, however, held this reasoning erroneous and quashed the impugned rejection order. Core principles established include:
Final determinations on each issue are:
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