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Rajasthan High Court Upholds Section 54 CGST Act Pertaining To Tax Refund
ANIRUDH VIJAY
25 Jan 2022 1:54 PM IST
The Rajasthan High Court, Jaipur Bench has upheld the vires of Section 54 of the Central Goods and Services Tax Act, 2017 and Rajasthan Goods and Services Tax Act, 2017. The same pertains to Refund of tax.Noting that the Supreme Court has already upheld the vires of the statutory provision in question, the division bench comprising Chief Justice Akil Qureshi and Justice Sameer...
The Rajasthan High Court, Jaipur Bench has upheld the vires of Section 54 of the Central Goods and Services Tax Act, 2017 and Rajasthan Goods and Services Tax Act, 2017. The same pertains to Refund of tax.
Noting that the Supreme Court has already upheld the vires of the statutory provision in question, the division bench comprising Chief Justice Akil Qureshi and Justice Sameer Jain, observed,
"We may note one development, namely, that the Supreme Court in the Union of India and others Vs. VKC Footsteps India Pvt.Ltd., has upheld the vires of the statutory provisions under consideration. That being the situation, the petitioner's challenge to the statutory provisions must come to an end".
Section 54(1) stipulates a 2 years limitation period for claiming refund of any tax and interest. Specialized agencies like UNO seeking refund of tax paid on inward supplies have a limitation of six months from the last day of the quarter in which such supply was received. Section 54(3) provides for refund of any unutilised input tax credit at the end of any tax period.
Notably in VKC Footsteps India Pvt. Ltd., the Supreme Court, while rejecting the challenge against Section 54(3) on the ground that it violates equality doctrine under Article 14 of the Constitution, observed that when there is neither a constitutional guarantee nor a statutory entitlement to refund, the submission that goods and services must necessarily be treated at par on a matter of a refund of unutilized ITC cannot be accepted,
Background
In the present matter, the petitioner had claimed for a refund of the accumulated credit in the ledger account. The competent authority on such claim issued the impugned communication dated 19.12.2020. One of the grounds proposed for rejecting the refund claim was that the same was time barred.
The said authority however, before passing final order issued a show cause notice and permitted the petitioner to file reply within 15 days. Accordingly, the petitioner raised a contention that his refund claim is not subjected to the limitation period. Admittedly, the assistant commissioner is yet to pass a final order on the petitioner's refund claim.
In this regard, the petitioner challenged the vires of Section 54 of the Central Goods and Services Tax Act, 2017 and Rajasthan Goods and Services Tax Act, 2017 as ultra vires to the Constitution. In the alternative, he prayed that the COVID related extensions would apply to time limit provisions contained in the statutes for refund also.
Findings
The court refused to consider the argument of the petitioner that the COVID related extensions would apply to time limit provisions contained in the statutes for refund and opined that, at this stage, there is neither pleading nor corresponding prayer for declaration in this regard.
The court directed the Assistant Commissioner to decide the petitioner's refund claim, while bearing in mind the reply of the petitioner. The court observed that it would be open for the petitioner to raise additional grounds in support of the refund claim by filing a reply within one week. If any such further reply is filed, the authority shall take into consideration the same also while taking final decision, added the court.
Case Title: M/s Triveni Electrodes v. Union Of India and Ors.
Citation: 2022 LiveLaw (Raj) 34
Click Here To Read/Download Order
