Madras High Court Applies Limitation Period Relief To Refund Claims Under GST: EY
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This tax alert summarises a recent ruling of the Madras High Court. The issue involved was whether extended period of limitation as per Supreme Court order is applicable to refund claim filed under Goods and Services Tax.
Earlier, taking suo moto cognizance of the situation arising due to Covid-19 pandemic, the Supreme Court had extended the limitation period (prescribed under general or special law) in respect of judicial and quasi-judicial proceedings w.e.f. March 15, 2020 until October 02, 2021.
On July 20 this year, the Central Board of Indirect Taxes and Customs had clarified that:
Proceedings that need to be initiated or compliances that need to be done by the taxpayers; and
Quasi-judicial proceedings by tax authorities which include disposal of application for refund, adjudication proceedings of demand notice,
would continue to be governed by the time limit provided/extensions granted under the statute itself and the Supreme Court order would not apply to the said proceedings.
In the present case, the petitioner filed refund application after expiry of two years from the relevant date and the same was rejected by the Revenue. Aggrieved, the petitioner filed a writ petition before the high court.
The high court held that the apex court's order clearly ensures to the benefit of the petitioner and therefore, refund application needs to be entertained. Accordingly, it set aside the rejection order and directed Revenue to examine the refund application de novo and pass fresh order.
The ruling is likely to help businesses in cases where the limitation period as per GST law has expired.
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