Gujarat High Court

Nitrex Chemicals India Ltd vs Assistant Commissioner Goods And ... on 24 January, 2025

Author: Bhargav D. Karia

Bench: Bhargav D. Karia

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                             C/SCA/12375/2021                                         ORDER DATED: 24/01/2025

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                                    IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                                      R/SPECIAL CIVIL APPLICATION NO. 12375 of 2021

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                                       NITREX CHEMICALS INDIA LTD
                                                 Versus
                        ASSISTANT COMMISSIONER GOODS AND SERVICE TAX DIVISION VIII
                                                VALSAD
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                       Appearance:
                       MR AR CHAUHAN(6028) for the Petitioner(s) No. 1
                       MR PUNIT B JUNEJA(3972) for the Petitioner(s) No. 1
                       MR UTKARSH R SHARMA(6157) for the Respondent(s) No. 1
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                         CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
                               and
                               HONOURABLE MR.JUSTICE D.N.RAY

                                                           Date : 24/01/2025

                                                            ORAL ORDER

(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA)

1. Heard learned advocate Mr. Punit B.

Juneja for the petitioner and learned

advocate Mr. Utkarsh R. Sharma for the

respondent.

2. By this petition under Articles 226

and 227 of the Constitution of India, the

petitioner has prayed for direction to the

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respondent to refund the compensation cess

that has gone into as an input to the

goods exported in the Financial Year 2017-

2018 as per the provisions of section 54

of the Central/State Goods and Service Tax

Act, 2017 (For short "the GST Act").

3. Brief facts of the case are that the

petitioner was exporting Nitrocellulose to

various countries across the world as per

the provisions of Section 54 of the GST

Act read with section 16 of the Integrated

Goods and Service Tax Act,2017 (For short

"the IGST Act"). The petitioner was

entitled to refund of the IGST paid on the

zero rated supplies in form of export

which have been undertaken by the

petitioner from July, 2017 onwards after

coming into force of GST Act from

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01.07.2017.

4. It is the case of the petitioner that

application for refund of IGST was filed

by the petitioner on 15.06.2020. The

respondent authority did not grant the

refund application from July 2017 to March

2018 on the ground that the petitioner had

filed refund application beyond the

relevant period as per Explanation (2) to

section 54 of the GST Act. The petitioner

therefore, being aggrieved has preferred

this petition.

5. Learned advocate Mr. Punit Juneja for

the petitioner submitted that the delay on

part of the petitioner was inadvertent and

therefore, the petitioner should not be

deprived of its rightful claim of refund

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as per the provisions of the GST Act. It

was further submitted that as per Circular

No.06/2020 dated 03.02.2020, time period

for filing of the return was extended upto

05.02.2020 and as the petitioner has filed

refund application on 15.06.2020, same

would fall within the relevant period and

the respondent ought to have granted the

refund for the period from July, 2017 to

March,2018.

6. In support of his submission, reliance

is placed upon the decision of Punjab and

Haryana High Court in case of M/s. Proxima

Steel Forge Pvt Ltd. v. Union of India and

others in CWP-21975-2024 decided on

03.10.2024 wherein refund application was

rejected on the ground of limitation after

the appeal was allowed by the Joint

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Commissioner setting aside the order of

rejection of the refund claim on the

ground that subordinate officer could not

have refused to examine the case on merits

when remanded.

7. Reliance was also placed on the

decision of Madras High Court in case of

M/s. Lenovo (India) Pvt. ltd. Rep. By its

Authorised Signatory Mr. Seiyadou Ahamadou

v. the Joint Commissioner of GST (Appeals-

1) (Judgment dated 06.11.2023 rendered in

W.P. Nos. 23604 and 23605 of 2022) wherein

it is held that reading section 54(1) of

the GST Act would make it clear that

assessee can make application within two

years and the term used in the said

section "may make application before two

years from the relevant date in such form

and manner as may be prescribed" which

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means that the assessee may make

application within two years and it is not

mandatory that the application has to be

made within two years and in appropriate

cases, refund application can be made even

beyond two years.

8. It was therefore, submitted that when

the petitioner has preferred an

application for refund beyond the period

of two years, delay in filing the

application may be condoned as the

petitioner is otherwise entitled to refund

as per the provisions of section 54(3) of

the Act.

9. Reliance was also placed on Circular

No.45/19/2018-GST dated 30.05.2018 wherein

clarification on refund related issues are

made by the Central Board of Indirect

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Taxes and Customs (CBIC). Relying upon the

said circular, it was submitted that the

petitioner is required to file refund

claim for tax period only after filing the

details in Form GSTR-1. It was therefore,

submitted that considering the date of

filing the Form GSTR-1, the application

for refund filed by the petitioner would

be within period of two years. It was

therefore, submitted that the petitioner

is entitled to the refund as per the said

circular.

10. On the other hand, learned advocate

Mr. Utkarsh Sharma appearing for the

respondent authority submitted that there

is no dispute with regard to the fact that

the petitioner had exported goods from

July, 2017 to March, 2018 and application

for refund was filed on 15.06.2020 and for

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the said period, the application for

refund was beyond the prescribed beyond of

years as per the provisions of section

54(1) of the Act.

11. In support of his submission, reliance

was placed on the following averments made

in the affidavit in reply on behalf of the

respondent authorities:

"On reading of the above mentioned provisions, it is clear that section 54 (1) provides the time limit to file a refund within two years from the relevant date which is ample amount of time to file the refund applications for any given period. Honble High Court of Gujarat in its order dated 15.12.2011 in the case of IOC Ltd. Vs. UOI (SCA No. 12074/2011) while dealing the similar issue of refund in case of excise while interpreting the provisions of section 11 B of Central Excise Act, 1944 has held as under:

"We are unable to uphold the contention that such period of limitation was only procedural requirement and therefore could be extended upon showing sufficient cause for not filling

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the claim earlier. To begin with, the provisions of Section 11 B itself are sufficiently clear. Sub-section (1) of Section 11 E, as already noted, provides that any claiming refund of any duty of excise may make an application for refund of such duty before the expiry of one year from the relevant date. Remedy to claim refund of duty which is otherwise in law refundable therefore, comes with a period of limitation of one year. There is no indication in the said provision that such period could be extended by the competent authority on sufficient cause being shown. Secondly, we find that the Apex Court in the case of Mafatlal Industries Ltd. V. Union of India (1997) 5 SCC 536 had the occasion to deal with the question of delayed claim of refund of Customs and Central Excise. Per majority view, it was held that where refund claim is on the ground of the provisions of the Central Excise and Customs Act where under duty is levied is held to be unconstitutional, only in such cases suit or writ petition would be maintainable. Other than such cases, all refund claim must be filed and adjudicated under the Central Excise and Customs Act, as the case may be. Combined with the said decision, if we also take into account the observations of the Apex court in the case of kriloskar Pneumtic Company (supra), it would become clear that the petitioner had to file refund claim as provided under section 11 B of the Act and even this court would not be in a position to ignore the substantive provisions and the time limit prescribed therein.

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6.2 With reference to Ground B of the petition, it is submitted that the petitioner is entitled for claim of refund under the category of refund of unutilized ITC/cess used in making zero rated supplies of goods (exports)/services for export and to SEZ under section 54 (3) (i) of CGST Act, 2017 subject to the provisions of sub-section (10) of Section 54 of CSGT Act, 2017 provided that application for such refund may be filed within the expiry of two years from the relevant date as per Section 54(1) of CGST Act, 2017.

6.3 With reference to Ground C of the petition, it is submitted that the petitioner's claim that the delay in filing of refund for the tax period from July, 2017 to March, 2020 due to nationwide lockdown announced in March 2020 due to Covid-19 pandemic cannot be sustainable as lockdown was announced in the month March, 2020 whereas the last date of filling of refund claim application for the period from July, 2017 to February, 2020 was ends on 20.03.2020 well before of lockdown. It is to mention that on 31.03.2020, keeping in view the situation arising out of COVID-19, an ordinance THE TAXATION AND OTHER LAWS (RELAXATION OF CERTAIN PROVISIONS) ORDINANCE, 2020 was promulgated by the Hon'ble President inserting section 168A in CGST Act, 2017 for granting power to the Government to extend time limit in special circumstances. Accordingly, Notification No. 35/2020-Central Tax dated 03.04.2020 was issued vide which due date for filing of refund

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application specified in, or prescribed or notified under GST Act, falls during the period from the 20th march, 2020 to 29th june,2020 was extended upto 30th June, 2020. Therefore, the due date for filling of refund claim for the period of March 2018 was extended upto 30.06.2020. In view of the above, the petitioner was eligible for the refund of tax period March, 2018 only. Accordingly, the eligible amount of refund for the period of March, 2018 amounting to Rs. 6,19,302/ - was sanctioned and the remaining amount amounting to Rs. 45,61,806/- was rejected on the ground of limitation.

6.4 With reference to Ground D of the petition, it is submitted that Section 54(1) of CGST Act, 2017 provides that the petitioner to file the refund application within the period of two years from the relevant date and every claim filed within the time limit prescribed in the law is considered and processed as per the Rule 89 of CGST Rules, 2017 and as per Section 54 of the CGST, Act 2017. Any refund claim which is filed beyond the time period prescribed by statute cannot be granted

6.5 With reference to Ground E of the petition, it is submitted that the CGST, Act 2017 came in effect from 01.07.2017, and it has since provided many relaxations to the petitioner regarding filing of returns, refund application etc. In this case the petitioner was given relaxation in the date of filing of refund application for the month of March, 2018 from 20.04.2020 to 30.06.2020 and due to that

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relaxation in filing of refund application the refund amount of Rs. 6,19,302/- became eligible, otherwise that would have also been ineligible. The Law is always working towards the welfare of the taxpayers of this country and it considers the demands of taxpayers through various GST council meetings, by way of Circulars and Notifications issued from time to time. In such matter, Hon'ble Supreme Court in the case of Collector Land Acquisition Anantnag & others vs. Ms. Katji & Others reported in 1987 (28) ELT 185 (SC) has held that when delay is within condonable limit laid down by the statute, the discretion vested in the authority to condone such delay is to be exercised following guidelines laid down in the said judgment. But when there is no such condonable limit and the claim is filed beyond time period prescribed by statue, than there is no discretion to any authority to extend the time limit.

6.6 With reference to Ground F of the petition, it is submitted that Every refund application including zero rated supplies including exports out of India have to be processed in accordance with the provisions laid down under section 54 of CGST Act, 2017 and Rule 89 of CGST Rule, 2017 and the refund application filled by the petitioner has been processed in accordance with the provisions of section 54 of CGST Act, 2017 read with Rule 89 of CGST Rules, 2017 as prescribed for the purpose.

6.7 With reference to Ground G of the petition,

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it is submitted that the rejected refund amount is re-credited in the credit ledger of the petitioner in respective heads i.e. CGST/SGST/IGST/Cess by way of issuing PMT-03 as per sub-rule (4) of Rule 86 of CGST Rules, 2017 and the same can be used for payment of tax by the petitioner."

12. It was further submitted that the

petitioner filed refund application for

tax period from July 2017 to March, 2018

on 15.06.2020 and the last date for filing

refund application for the period July,

2017 was 25.08.2019 and for the period

February, 2018 was 20.03.2020 and till

then national lock-down was not announced

due to Covid-2019 pandemic and the

petitioner had ample time to file refund

application for the said period. It was

submitted that as per section 54(1) of the

GST Act, time limit to file refund is

within two years from the relevant date

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and there was ample time to file refund

application for the said period. Reliance

was placed on the decision of this Court

in case of IOC Ltd. v. UOI rendered on

15.12.2011 in Special Civil Application

No.12074/2011 in support of his

submission.

13. It was therefore, submitted that the

petitioner is not entitled to the refund

for the period from July, 2017 to March,

2018.

14. Having heard the learned advocates for

the respective parties and on perusal of

the material placed on record, the

contention raised on behalf of the

petitioner to apply the provisions of

section 54(1) for extending the relevant

date upto the date of filing of the return

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cannot be accepted.

15. Section 54(1) reads as under:

"Section 54. Refund of tax.-

(1) Any person claiming refund of any tax and interest, if any, paid on such tax or any other amount paid by him, may make an application before the expiry of two years from the relevant date in such form and manner as may be prescribed:.."

16. Relevant date is explained in

Explanation to section 54 as under:

"(2) "relevant date" means-

(a) in the case of goods exported out of India where a refund of tax paid is available in respect of goods themselves or, as the case may be, the inputs or input services used in such goods,-

(i) if the goods are exported by sea or air, the date on which the ship or the aircraft in which such goods are loaded, leaves India; or....."

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17. On conjoint reading of Explanation 2

with Section 54(1), it is clear that any

person claiming refund of any tax and

interest, if any, paid on such tax or any

other amount paid by him, has to make

application before the expiry of two years

from the relevant date and as per

Explanation 2, relevant date means in the

case of goods exported out of India is the

date on which such goods are loaded either

in Ship or aircraft, leaves India is the

relevant date. Therefore, in the facts of

the case relevant date for the goods

exported by the petitioner would be from

the date of shipping mentioned in the

shipping bills. Therefore, period of two

years is required to be calculated from

the date of shipping.

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18. The respondent authorities have

granted the refund to the petitioner with

regard to the shipping bills which are

falling within the period of two years

prior to the date of filing of the refund

application on 26.06.2020 in respect of

shipping bills from July, 2017 to March,

2018.

19. This Court in decision in case of IOC

Limited (supra) while dealing with the

similar issue of refund in case of excise

while interpreting the provisions of

section 11B of the Central Excise Act,

1944 has held as under:

                                                 "We   are   unable    to  uphold   the
                                                 contention   that    such  period   of
                                                 limitation    was    only   procedural

requirement and therefore could be extended upon showing sufficient cause for not filing the claim earlier. To begin with, the

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provisions of section 11B itself are sufficiently clear. Sub-section (1) of section 11B, as already noted, provides that any person claiming refund of any duty of excise may make an application for refund of such duty before the expiry of one year from the relevant date. Remedy to claim refund of duty which is otherwise in law refundable therefore, comes with a period of limitation of one year. There is no indication in the said provision that such period could be extended by the competent authority on sufficient cause being shown.

Secondly, we find that the Apex Court in the case of Mafatlal Industries Ltd. v. Union of India, (1997) 5 SCC 536 had the occasion to deal with the question of delayed claim of refund of customs and central excise. Per majority view, it was held that where refund claim is on the ground of the provisions of the Central Excise and Customs Act whereunder duty is levied is held to be unconstitutional, only in such cases suit or writ petition would be maintainable. Other than such cases, all refund claims must be filed and adjudicated under the Central Excise and Customs Act, as the case may be. Combined with the said decision, if we also take into account the observations of the Apex Court in the case of Kirloskar Pneumatic Company (supra), it would become clear that the petitioner had to file refund claim as provided

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under section 11B of the Act and even this Court would not be in a position to ignore the substantive provisions and the time limit prescribed therein."

20. In view of above decision wherein

decision of Hon'ble Apex Court in case of

Mafatlal Industries Ltv. v. Union of India

reported in (1997) 5 SCC 536 has been

followed with respect to the delayed claim

of refund of custom and excise wherein it

is held that where the refund application

is on the ground of provisions of Central

Excise and Customs Act whereunder duty is

levied is held to be unconstitutional,

only in such cases suit or writ petition

would be maintainable. Therefore, in facts