KIRLOSKAR BROTHERS LIMITED vs SAGAR BANDU KAMBLE, Baban Raibhan Zagare

GOODS AND SERVICES TAX APPELLATE TRIBUNAL
PUNE BENCH
APL/PUN/8/2026
M/s KIRLOSKAR BROTHERS
LIMITED, PUNE
………….Appellant
Versus
THE COMMISSIONER OF STATE
TAX, MAHARASHTRA
………….Respondent
Quorum:
Hon’ble Shridhar Mahadeo Bhosale, Member (Judicial)
Hon’ble Dr. Nirmal Kumar Soren, Member (Technical)
Counsel for Appellant Counsel for Respondent
Smt Komal Sonthaliya,
Chartered Accountant,
Shri Amit Somani,
Dy. General Manager - Finance
Shri Prakash Kulkarni,
Dy. Commissioner of GST
FINAL ORDER
Date of Last Hearing: 23.10.2026
Date of Order: 29.10.2026
Per: Shridhar Mahadeo Bhosale, Member (Judicial)
1. The present appeal has been filed under Section 112(1) of the
Central Goods and Services Tax Act, 2017 (hereinafter referred to
as the “CGST Act”) and Maharashtra Goods and Services Tax Act,
2017, challenging the legality and propriety of the Order-in-Appeal
dated 07.01.2026, passed by the Appellate Authority, Joint
Commissioner of State Tax, Pune Division-2, Pune, in First Appeal
No. G-429/AD271225002622J/2025-26. By the impugned Order-
in-Appeal, the Appellate Authority upheld the Refund Rejection
Order bearing No. DCST/E-0607/Refund/KBL/2025-26/B-207
dated 06.10.2025, passed by the Adjudicating Authority, Deputy
Commissioner of State Tax, Zone–Pune-South-West, whereby the
refund claim amounting to 91,00,000/- (Rupees Ninety-One Lakh
₹
only), comprising 45,50,000/- towards Central Goods and
₹
Services Tax (CGST) and 45,50,000/- towards State Goods and
₹
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Services Tax (SGST), was rejected under Section 54 of the CGST
Act.
2. M/s. Kirloskar Brothers Limited (hereinafter referred to as
the “Appellant”), a registered person holding GSTIN
27AAACK7300E1ZZ, is engaged in the manufacture of canned
motor pumps and equipment, as well as the execution of works
contract services, among other activities. In February 2011, the
Appellant received a contract from the Department of Atomic
Energy, Government of India, for the supply of 12 canned motor
pumps intended for use in nuclear facilities. The contract was
awarded under a single composite arrangement for a total
consideration of ₹ 72,74,00,000/- (Rupees Seventy-Two Crore
Seventy-Four Lakh only). Pursuant to the said contract, on
16.03.2018, the Appellant issued Invoice No. 1710012360 for
₹ 13,00,00,000/- (Rupees Thirteen Crore only) towards the supply
of the first canned motor pump. At the time of issuing the invoice,
the Appellant charged GST at the rate of 12% (comprising CGST
and SGST), amounting to 1,56,00,000/-. ₹
3. It is the case of the Appellant that, while supplying the
canned motor pump under the aforesaid contract, GST was
inadvertently charged at the rate of 12% instead of the applicable
concessional rate of 5% under Notification No. 12/2017-Central
Tax (Rate) dated 28.06.2017. The Appellant contends that the
higher rate was applied inadvertently due to a human error at the
time of entering the tax rate in the system. The tax charged at 12%
was duly reported and paid through the Appellant’s GSTR-3B
return for March 2018, filed on 22.04.2018.
4. The aforesaid error came to the Appellant’s notice during the
financial year 2024–25, when the Department of Atomic Energy
issued the final settlement invoice applying GST at the rate of 5%
and cross-referencing the original supplies. Upon verification, the
Appellant identified that GST had been paid in excess by
₹ 91,00,000/- (Rupees Ninety-One Lakh only). Accordingly, on
04.07.2025, the Appellant filed an application for refund of the said
excess tax in Form GST RFD-01, along with the requisite
supporting documents.
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5. Thereafter, the Deputy Commissioner of State Tax, Pune,
issued a Show Cause Notice in Form GST RFD-08 dated
19.08.2025, calling upon the Appellant to explain the grounds for
claiming the refund of the excess tax paid. The Appellant submitted
a detailed reply to the said notice, setting out the facts and grounds
in support of its refund claim. However, the Deputy Commissioner
of State Tax, by Refund Rejection Order in Form GST RFD-06
dated 06.10.2025, bearing Reference No. ZD271025014751R,
rejected the refund claim solely on the ground of limitation. The
Adjudicating Authority proceeded on the basis that the supply
constituted a continuous supply of goods under Section 31(4) of the
CGST Act and that the relevant date for computing the limitation
period was 22.04.2018, being the date on which the Appellant filed
its GSTR-3B return for March 2018. On this basis, the proper
officer held that the refund application filed on 04.07.2025 was
beyond the prescribed period of limitation.
6. Being aggrieved with Refund Rejection Order, appellant filed
an appeal before Appellate Authority (Joint Commissioner of State
Tax, Appeal -04, Pune). The appellant before Appellate Authority,
raised following grounds to challenge Refund Rejection Order-
(a) The supply is not a "continuous supply of goods"
under Section 2(32)
(b) Even if assumed continuous supply is assumed, the
refund cannot be denied merely because 2-year period has
lapsed.
(c) Relevant date has been wrongly computed.
(d) Refund is admissible-no unjust enrichment.
7. Findings of the First Appellate Authority-The Appellate
Authority, after the parties provided an opportunity of being heard
and considering the material available on record, did not accept the
grounds raised by the Appellant and, by order dated 07.01.2026,
upheld the Refund Rejection Order passed by the Deputy
Commissioner of State Tax. The Appellate Authority observed that
the relevant date for computing the limitation period was
22.04.2018, as determined after considering the invoice, GST
returns, submissions made by the Appellant, and the facts and
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circumstances of the case. The Appellate Authority further
observed that, in terms of Rule 92(3) of the CGST Rules, 2017, a
refund claim is liable to be rejected where the prescribed statutory
conditions are not fulfilled. It held that statutory authorities do not
possess any inherent power to condone a substantial delay in the
absence of an express statutory provision authorising such
condonation. Since the Appellant had filed the refund application
beyond the period prescribed under Section 54 of the CGST Act,
2017, the Appellate Authority concluded that the Proper Officer had
rightly rejected the claim and that the rejection was legally
sustainable. The Appellate Authority accordingly held that the
refund claim was barred by limitation and that the CGST Act, 2017,
contained no provision empowering the authorities to condone the
delay in filing the application.
8. The Appellate Authority also observed that the invoices,
consideration for the transactions, and delivery of the goods
involving GST at the rate of 12% had been dealt with by the
supplier and the recipient with knowledge of the rate charged. On
this basis, it concluded that the amount claimed could not be treated
as excess tax paid within the meaning of the applicable statutory
provisions. Accordingly, the rejection of the refund claim of
₹ 91,00,000/- was upheld.
9. Being aggrieved by the order dated 07.01.2026 passed by the
Joint Commissioner of State Tax (Appellate Authority), the
Appellant has challenged the legality and propriety of the impugned
order before this Tribunal on the following grounds:
(i) The First Appellate Authority erred in law in
determining the commencement of the limitation period
under Section 54 of the Central Goods and Services Tax Act,
2017, without correctly appreciating the legal principles
governing refund claims arising from the payment of tax in
excess of the rate prescribed under law.
(ii) The impugned order is contrary to the constitutional
mandate embodied in Article 265 of the Constitution of
India, which prohibits the levy or collection of tax except by
authority of law.
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(iii) The Appellant relies upon the judgment of the Hon’ble
Supreme Court in Mafatlal Industries Ltd. v. Union of India
in support of its contention that tax collected without
authority of law cannot be retained by the State merely on the
ground of limitation, subject to the applicable statutory
framework and the principles laid down therein.
(iv) The Appellate Authority failed to consider the
provisions of Section 54(8) of the CGST Act, 2017, which
provide for specified exceptions to the doctrine of unjust
enrichment. The Appellant contends that the refund claim
ought to have been examined in the light of the applicable
statutory exceptions and the relevant material on record
concerning the incidence of tax and its ultimate burden.
10. The Respondent, in response to the notice issued in the
present proceedings, appeared through its Authorised
Representative and filed a written reply. The Respondent contended
that the Appellate Authority had rightly determined 22.04.2018 as
the relevant date for the purpose of computing the limitation period
under Section 54 of the Central Goods and Services Tax Act, 2017.
It was further submitted that, since the refund application was filed
on 04.07.2025, the claim was barred by limitation and had,
therefore, been rightly rejected.
11. Heard the learned Authorised Representatives appearing on
behalf of both parties at length. The written submissions filed by the
Appellant have also been duly considered, along with the material
available on record.
12. The learned Authorised Representative, Smt. Sonthaliya,
appearing on behalf of the Appellant, vehemently submitted that the
amount in question was paid in excess of the tax legally payable
and, therefore, the excess amount could not be regarded as tax
lawfully leviable under Section 54 of the CGST Act, 2017, read
with Article 265 of the Constitution of India. It was submitted that
the collection and retention of such excess amount by the
department, being unsupported by the authority of law, could not be
justified merely by invoking the limitation prescribed under Section
54 of the CGST Act. On this basis, the learned Authorised
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Representative argued that the Appellant’s refund claim ought not
to be rejected solely on the ground of limitation.
13. In support of the aforesaid submissions, the learned
Authorised Representative placed reliance upon the following
judgments:
(i) Rajendra Narayan Mohanty v. CT & GST & Others ,
judgment dated 12.02.2026, delivered by the Hon’ble High
Court of Orissa.
(ii) Delhi Metro Rail Corporation v. Additional
Commissioner of CGST (Appeal-II) , judgment dated
18.09.2023, delivered by the Hon’ble High Court of Delhi,
reported in (2023) 10 Centax 355 (Del.).
(iii) M/s. Life Science Pvt. Ltd. v. Union of India , judgment
dated 07.11.2025, delivered by the Hon’ble High Court of
Karnataka.
14. The learned Authorised Representative for appellant further
submitted that, even if the Respondent places reliance upon the
judgment of the Hon’ble Supreme Court in Mafatlal Industries Ltd.
v. Union of India , (1997) 5 SCC 536, the Hon’ble Supreme Court
has recognised the legal distinction concerning claims for refund of
amounts collected without authority of law. It was submitted that
the exception recognised in the said judgment was subsequently
applied by the Hon’ble High Court of Orissa in Rajendra Narayan
Mohanty, supra.
15. The learned Authorised Representative further submitted that
the Appellant had acted with due diligence and in good faith and
had filed the refund application promptly upon discovering the
excess payment of tax. It was contended that the Appellant’s
entitlement to seek refund arose upon discovery of the mistake and,
accordingly, the relevant date for computing the limitation period
ought to be determined with reference to the date on which the
mistake was discovered or became reasonably ascertainable, rather
than mechanically adopting the date of payment of tax.
16. It was further submitted that the grant of refund would not
preclude the department from independently examining the
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underlying transaction and initiating appropriate proceedings under
Sections 73 or 74 of the CGST Act, 2017, wherever permissible in
law. According to the Appellant, the availability of such statutory
powers would safeguard the interests of the Revenue, while
ensuring that an otherwise legitimate refund claim is not rejected
solely on the ground of limitation.
17. Ld. authorized representative, Shri Kulkarni, for respondent
submitted that the cases on which appellant relied upon are decide
by Hon’ble High Courts under the power vested with them under
Art 226 of Constitution of India. He submitted that both authorities
below rightly considered the provision of Sec 54 of CGST Act to
decide relevant date and period of limitation. He further submitted
that no interference is required and appeal deserves to be dismissed.
18. On the facts and circumstances of the case, and having regard
to the submissions advanced by both parties, the following issues
arise for consideration in the present appeal:
(i) Whether the Proper Officer and the Appellate
Authority were justified in determining 22.04.2018 as the
relevant date for computing the period of limitation for
claiming a refund of the excess tax paid?
(ii) If yes, whether the refund application in FORM GST
RFD-01, filed by the Appellant for claiming a refund of the
excess tax paid amounting to 91,00,000/-, is barred by ₹
limitation under Section 54 of the CGST Act, 2017?
(iii) If the refund claim is found to be time-barred, whether
the Proper Officer or Appellate Authority under the
CGST/MGST Act is empowered to sanction such a refund
beyond the prescribed period of limitation?
19. Sub Sec (1) of Sec.54 of CGST Act, state that 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.
Explanation for "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-
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(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
(ii) if the goods are exported by land, the date on
which such goods pass the frontier; or
(iii) if the goods are exported by post, the date of
despatch of goods by the Post Office concerned
to a place outside India;
(b) in the case of supply of goods regarded as deemed
exports where a refund of tax paid is available in respect
of the goods, the date on which the return relating to
such deemed exports is furnished;
(ba) in case of zero-rated supply of goods or services or
both to a Special Economic Zone developer or a Special
Economic Zone unit where a refund of tax paid is
available in respect of such supplies themselves, or as
the case may be, the inputs or input services used in such
supplies, the due date for furnishing of return under
section 39 in respect of such supplies;
(c) in the case of services exported out of India where a
refund of tax paid is available in respect of services
themselves or, as the case may be, the inputs or input
services used in such services, the date of-
(i) receipt of payment in convertible foreign
exchange or in Indian rupees wherever permitted
by the Reserve Bank of India. where the supply
of services had been completed prior to the
receipt of such payment; or
(ii) issue of invoice, where payment for the
services had been received in advance prior to
the date of issue of the invoice;
(d) in case where the tax becomes refundable as a
consequence of judgment, decree, order or direction of
the Appellate Authority, Appellate Tribunal or any
court, the date of communication of such judgment,
decree, order or direction;
(e) in the case of refund of unutilised input tax credit
under clause (ii) of the first proviso to sub-section (3),
the due date for furnishing of return under section 39 for
the period in which such claim for refund arises;
(f) in the case where tax is paid provisionally under this
Act or the rules made thereunder, the date of adjustment
of tax after the final assessment thereof;
(g) in the case of a person, other than the supplier, the
date of receipt of goods or services or both by such
person; and
(h) in any other case, the date of payment of tax.
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20. Thus, Section 54 (1) of the act provides that any person
claiming refund of any tax and interest paid by him, may make an
application in prescribed manner application before the expiry of
two years from the relevant date. Sub section (9) of section 54 of
the act makes clear that notwithstanding anything to the contrary
contained in any order, judgment or other provisions of act or any
law, no refund shall be made except in accordance with the
provision of section 54 (8) of the Act. This section classifies refund
into six categories (a) to (h) and category applicable in present case
is (e). It is provided in section 54(8) (e) that refundable amount
shall be paid, if such amount is paid by applicant, and if he had not
passed on the incidence of such tax to any other person. The refund
of excess payment in question is covered in this category, however
it is subject to the satisfaction of above referred prescribed
condition. Therefore, it is necessary to examine whether this
condition i.e. ‘he had not passed on the incidence of such tax to any
other person’, has to be satisfied, to become eligible for refund.
21. Further Rule 89 of The CG ST Rules, 2017 prescribe the
procedure and conditions for application for refund of tax, interest,
penalty, fees or any other amount. The application shall be
accompanied with documents prescribed in Annexure in Form GST
RFD-1. The form further seeks detail of statement as per Rule 89(2)
(k).
22. The Respondent has not disputed that the Appellant paid
GST at the rate of 12% on Invoice No. 1710012360 dated
16.03.2018, issued in respect of the supply of goods made by the
Appellant to the Department of Atomic Energy. The Respondent
has also not disputed the applicability of Notification No. 12/2017-
Central Tax (Rate) dated 28.06.2017, under which the applicable
rate of GST for the said supply, being a supply to a Government
Entity, was 5%. Consequently, the Appellant paid GST in excess of
the applicable rate, amounting to 91,00,000/-, for which the refund ₹
application has been filed. Further, the Appellant has placed on
record a Certificate dated 30.06.2025 issued by a Chartered
Accountant, certifying that the tax in question was paid by the
Appellant and that the incidence of such tax had not been passed on
to any other person. The said certificate has been relied upon by the
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Appellant in support of its claim that the refund would not result in
unjust enrichment.
23. In the present case, the tax was duly reported and paid
through the GSTR-3B return for the tax period of March 2018,
which was filed on 22.04.2018. Accordingly, the relevant date for
computing the period of limitation of two years under Section 54(1)
of the Act has been reckoned as 22.04.2018.
24. Having regard to the date of payment of tax, the relevant date
for computing the period of limitation of two years prescribed under
Section 54(1) of the CGST Act, 2017, has been determined as
22.04.2018. The Appellant, however, has vehemently contended
that, in cases involving payment of excess tax under a mistake, the
right to claim a refund arises only upon discovery of such mistake.
The aforesaid contention, however, does not find express support in
the Section 54 of the Act, which does not specifically provide for
computation of the limitation period from the date of discovery of a
mistake in cases of excess payment of tax. Furthermore, the
Appellant has not placed on record any judicial precedent in support
of its contention, nor has any such precedent been brought to the
notice of the Authority. Accordingly, the contention that the
limitation period should commence from the date of discovery of
the mistake cannot be accepted in the absence of specific provision
in statute.
25. The learned Authorised Representative appearing on behalf
of the Appellant has, however, advanced a further contention that,
once the payment of excess tax by the Appellant and its retention by
the department are undisputed, the amount collected in excess of
the tax legally payable constitutes tax collected without authority of
law. It is submitted that, in view of the legal principles laid down by
the Hon’ble Supreme Court in the judgment relied upon by the
Appellant, the limitation prescribed under Section 54 of the CGST
Act, 2017, should not operate as a bar to the grant of refund in such
circumstances. The learned Authorised Representative has further
contended that both the authorities below failed to consider and
apply the relevant legal principles governing the refund of amounts
collected without authority of law, thereby rendering their
respective orders erroneous and unsustainable in law.
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26. The Appellant has referred to and relied upon the judgment
of the Constitution Bench of the Hon’ble Supreme Court of India in
Mafatlal Industries Ltd. v. Union of India , supra. In the said
judgment, the Hon’ble Supreme Court considered, inter alia, the
following two questions:
(i) Whether the term “mistake” occurring in Section 72 of
the Indian Contract Act, 1872, encompasses both a mistake
of law and a mistake of fact; and
(ii) Whether tax paid under a mistake of law is recoverable
under Section 72 of the Indian Contract Act, 1872.
27. The Hon’ble Apex Court, in para 41(E) observed as-
“E) It is not possible to conclude that any and every
claim for refund of illegal/unauthorised levy of tax, can
be made only in accordance with the provisions of the
Act (Rule 11, Section 11B etc., as the case may be), and
an action by way of suit or writ petition under Article
226 will not be maintainable under any circumstances.
An action by way of suit or a petition under Article 226
of the Constitution is maintainable to assail the levy or
order which is illegal, void or unauthorised or without
jurisdiction and/or claim refund, in cases covered by
propositions No. (1), (3), (4) and (5) in Dulabhai's case,
as one passed outside the Act, and ultra vires. Such
action will be governed by the general law and the
procedure and period of limitation provided by the
specific statute will have no application.”
28. It is pertinent to note that the learned Authorised
Representative appearing on behalf of the Appellant referred to the
decision of the Hon’ble Supreme Court in Mafatlal Industries Ltd ,
supra, apprehending that the Respondent might rely upon the said
decision in support of its case. However, the Respondent did not
place reliance upon the said judgment. Be that as it may, since the
Appellant has itself referred to the said decision, it is necessary to
examine its applicability to the issue involved in the present
proceedings.
29. In Mafatlal Industries Ltd. supra , the Hon’ble Supreme Court
considered, inter alia, the issue of refund of central excise duty or
customs duty paid under a mistake of law, including circumstances
in which the levy was subsequently found to be illegal or
unconstitutional and the incidence of such duty had been passed on
to consumers. The Hon’ble Supreme Court emphasised that claims
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for refund of duties must ordinarily be pursued in accordance with
the statutory mechanism prescribed under the relevant enactment,
including Section 11B of the Central Excise Act, 1944. It was
further held that a claim for refund cannot ordinarily be pursued by
way of a civil suit in disregard of the statutory scheme. Although
the constitutional jurisdiction of the High Courts under Article 226
and of the Supreme Court under Article 32 remains available, the
exercise of such jurisdiction does not, by itself, dispense with
applicable statutory restrictions.
30. However, in the present case, issue of refund of is whether an
amount paid as GST in excess under a mistake of law the rate
legally applicable to a transaction can be claimed after expiry of the
limitation period prescribed under Section 54 of the CGST Act,
2017. The specific question, therefore, is whether the principles
relied upon by the Appellant in the present proceedings support an
exception to the statutory limitation prescribed under the GST law,
to Proper officer. In our considered opinion, the decision in
Mafatlal Industries Ltd, supra, would not help the appellant. Thus,
the reliance placed by the Appellant on Mafatlal Industries Ltd.
does not, by itself, advance its contention.
31. In case of Rajendra Mohanty, supra, Hon’ble High Court of
Orissa, held that-
“ refund claimed in respect of tax paid erroneously or
under mistaken notion cannot be denied solely on the
ground of limitation stipulated in Section 54 of the
CGST/OGST Act, as the matter falls within the ambit of
Article 265 of the Constitution of India, which mandates
that no tax shall be levied or collected except by
authority of law. The Court held that where tax has been
deposited twice under a mistake, the limitation
prescribed under Section 54 of the GST Act is
inapplicable, and the State cannot retain such amount.
32. In case of Delhi Metro Rail Corporation (supra), Hon’ble
High Court of Delhi, held that-
“The period of limitation for applying for a refund as
prescribed under Section 54 of the CGST Act, would not
apply where GST is not chargeable and it is established
an amount has been deposited under a mistake of law. In
this case of Gujarat High Court decided on 22.12.2020,
in M/s Cosmol Energy Private Limited v. State of
Gujarat (supra) indicates that the issue decided in the
said case is similar to the one involved in the present
case.”
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The Hon’ble court had further held that
" Section 54 of the CGST Act is applicable only for
claiming refund of any tax paid under the provisions of
the CGST Act and/or the CGST Act. The amount
collected by the Revenue without authority of law is not
considered as tax collected by them and, therefore,
Section 54 is not applicable"
33. The Appellant has placed reliance before Appellate Authority
upon the judgment dated 07.11.2025 passed by the Hon’ble Single
Bench of the High Court of Karnataka in M/s.Merck Life Science
Pvt. Ltd, supra . In the said judgment, which disposed of a batch of
five writ petitions, the Hon’ble Court held that the period of
limitation prescribed under Section 54 of the CGST Act is directory
and not mandatory, and accordingly allowed the writ petitions. In
one of the said petitions, the issue for consideration concerned the
recovery of tax without authority of law, as contemplated under
Article 265 of the Constitution of India.
34. The aforesaid judgment dated 07.11.2025 was subsequently
challenged by the Commissioner by filing writ appeals before the
Hon’ble Division Bench of the High Court of Karnataka. By its
judgment dated 17.3.2026 the Hon’ble Division Bench reversed the
judgment passed by the learned Single Judge and set aside the
findings recorded therein. The judgment of the Hon’ble Division
Bench was brought to the notice of the learned Authorised
Representative appearing for the Appellant by this Bench on the
first date of hearing, with a view to offer the, Appellant an
opportunity to make submissions in that regard. Thereafter, the
Appellant uploaded its written submissions, wherein reliance was
placed upon the judgments referred above.
35. In view of the above, the relevant observations and
conclusions recorded by the Hon’ble Division Bench of the High
Court of Karnataka in its judgment dated 17.3.2026 in the matter of
Assistant Commissioner of Central Taxes, Bengaluru Versus M/s.
Merck Life Science Pvt. Ltd. are reproduced hereinbelow:
“9. The entire scheme of the CGST Act,2017 is that of a
time-bound enactment. Every compliance by the
registered person/taxpayer as well as every action by the
proper officer is governed by prescribed timelines. The
time limits form the backbone of the Act, and such
timelines are required to be applied strictly. If the
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timelines are not viewed and enforced strictly, the
concept of finality in proceedings cannot be sustained
9.1 An equitable approach is required to be adopted on
both sides, namely, the registered person/taxpayer and
the proper officer. The Act provides for refund under
Section 54, which prescribes a period of two years from
the relevant date. The expression "relevant date" is
explained in the Explanation to Section 54, with
reference to different types of transactions. In residuary
cases, the relevant date is the date of payment of tax.
9.4 In the present case, however, it is not necessary for
this Court to adjudicate regarding the entitlement to the
refund. The Revenue has made a categorical statement,
and it is also evident from the stand taken that the
entitlement of the assessee to the refund is not in dispute.
The refund claim has been denied not on the ground of
entitlement, but solely on the ground of limitation.
9.5 The proper officer, while administering the Act, is
bound by the provisions enacted therein in their strict
sense. There is no discretion vested in the proper officer
to entertain a refund claim filed after the expiry of two
years, unless specific exceptions are provided enabling
such consideration. In the absence of such enabling
provisions, the period of two years remains mandatory in
so far as the proper officer is concerned.
9.6 Ordinarily, in taxing statutes, certain exceptions are
provided conferring jurisdiction on the authorities under
the Act to condone the timelines in specified situations
or circumstances. However, in response to a specific
query of the Court, it has been submitted that no such
enabling provision or mechanism is provided under the
Act to consider grievances in cases where claims have
not been made within the prescribed time, particularly in
respect of refund under Section 54, of the Act.
9.7 In the absence of any enabling power either to
condone the delay or to treat the period of two years as
directory, the only possible interpretation of Section 54,
is that the period prescribed therein is mandatory. The
mere presence of the word "may", a contended, cannot
always be construed as directory; the expression must
take its colour as either directory or mandatory
depending upon the context in which it is used.
9.8 As analysed above, having regard to the purpose
behind prescribing the period of two years, we have no
hesitation in holding that the said period must be read as
mandatory. If such a construction is not adopted, it
would confer unintended discretion upon the proper
officer and may also enable a registered person/taxpayer
to circumvent the provisions of Section 73 or 74 of the
Act, as the case may be.
10.1 There may be instances where, due to genuine or
unavoidable reasons beyond the control of the taxpayer,
the period prescribed under Section 54, lapses. If no
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remedy is made available in such circumstances, the
provision may operate with undue harshness and
arbitrariness. In the absence of any such enabling
provision under the Act, the jurisdiction of this Court
under Article 226 of the Constitution of India remains
the only available remedy. Merely because the provision
under Section 54, is held to be mandatory, it cannot be
said that the jurisdiction vested in this Court Article 226
stands excluded or rendered unavailable.
10.4 The bar imposed under Section 54 operates only in
relation to the proper officer entertaining a refund claim
after the expiry of two years. The said bar cannot be
construed as being applicable to the Court while
exercising its jurisdiction under Article 226 of the
Constitution of India.
10.5 We are therefore of the view that where an
application for refund is not filed within the time frame
prescribed under Section 54 of the Act, the person
claiming refund may invoke the writ jurisdiction of this
Court under Article 226 of the Constitution of India. We
also declare that the writ jurisdiction would be available
for an additional reason, namely that no tax can be
levied or collected except by authority of law, as
mandated under Article 265 of the Constitution of India.
11.1 If, while considering such a belated refund claim, a
situation contemplated under Section 73/74 arises, and
the refund claim is made after the time prescribed
therein, the proper officer would be disentitled from
Section 73/74, even though he may be in possession of
valid material. Had the refund claim been filed within
the prescribed period of two years, the proper officer
would undoubtedly have been entitled to rely upon such
material against the taxpayer.
11.2 When delay in claiming refund is condoned, the
proper officer must also be enabled to exercise or invoke
such other provisions as would have been available had
the refund claim been filed within time. If such an
enabling principle is not recognised, it may result in
entertaining unverifiable refund claims and prevent the
proper officer from initiating further action under the
Act. In the absence of such enablement in favour of the
proper officer, mere condonation of delay in filing a
refund claim may encourage belated claims, which may
or may not be genuine, while at the same time
foreclosing action otherwise permissible under the Act,
including Section 73 and 74.
11.3 Adopting such an approach would strike a balance
between the interests of the taxpayer and the Revenue. It
would also ensure that only genuine refund claims
invoke the writ jurisdiction of this Court under Article
226 of the Constitution of India. This view is taken
having regard to the broad object of the Act, namely, the
levy and collection of tax in accordance with law.
Page 15 of 18

11.4 We hold that the taxpayer is entitled to seek
condonation of delay in claiming refund by invoking the
jurisdiction of this Court under Article 226 of the
Constitution of India. The Court may consider such
request for condonation of delay on a case- to-case basis
and, if found appropriate, direct the proper officer to
consider the refund claim in accordance with law.
11.5 While condoning the delay in filing the refund
claim, the Court must ensure that if any consequential
action under Section 73 or 74 is required to be invoked
and if the limitation prescribed for such action has
expired, appropriate extension of time is granted to
enable such action.
36. The Hon’ble High Court in para 12 summarised-
“12. In the light of the above reasoning and discussion,
we conclude as under:
(a) The period of two years prescribed under Section 54
of the CGST Act, 2017 is mandatory.
(b) As no remedy is provided under CGST ACT to
consider a refund claim under Section 54, if filed
belatedly, it is open to any person claiming refund to
avail remedy under Article 226 of the Constitution of
India.
(c) The condonation of delay ordered by the Court shall
be subject to the condition that corresponding extension
of time is granted in favour of the proper officer to
invoke other applicable provisions, including Section 73
and 74 of the Act, as may be necessary.
(d) If such other remedies were otherwise available had
the refund claim been filed within two years under
Section 54 of the Act, the same shall continue to remain
available.
(e) Once condonation of delay is granted by the Court in
filing the refund claim, the claim shall be treated as
having been filed within the prescribed period of two
years, thereby enabling all consequential benefits to the
claimant as well as the exercise of appropriate powers by
the proper officer under the Act.
(f) The scope of a writ petition under Article 226 would
ordinarily be limited to the question of condonation of
delay, and would not ordinarily extend to determination
of the refund claim itself, unless the entitlement to the
refund is undisputed.”
37. Thus, upon consideration of the facts and circumstances of
the case and the applicable legal provisions, it is evident that neither
the Proper Officer nor the Appellate Authority is empowered under
the CGST Act or the MGST Act, to sanction a refund claim filed
Page 16 of 18

beyond the prescribed period of limitation, even if the tax paid
exceeds the amount legally payable under the applicable rate of tax.
38. The Appellant has contended that the refund claim is
admissible as the incidence of the excess tax paid has not been
passed on to the customer or any other person. Section 54(8) of the
CGST Act, 2017, provides for specified circumstances in which the
amount of refund, notwithstanding the general rule under Section
54(5), is required to be paid directly to the applicant instead of
being credited to the Consumer Welfare Fund. The statutory
scheme thus distinguishes between the sanction of a refund and the
manner in which the sanctioned amount is to be disbursed.
However, the applicability of Section 54(8) arises only when a
refund is otherwise admissible under the Act. The provision does
not independently create a right to refund, nor does it dispense with
the statutory conditions governing the admissibility of a refund
claim, including the limitation prescribed under Section 54(1).
Accordingly, even if the Appellant establishes that the incidence of
the excess tax paid has not been passed on to the customer and that
the claim is not hit by the principle of unjust enrichment, such
circumstance, by itself, cannot overcome the bar of limitation
prescribed under Section 54(1). The question of payment of the
refund directly to the Appellant under Section 54(8) would arise
only if the refund claim is otherwise found admissible in
accordance with law.
39. In view of the foregoing discussion and for the reasons stated
hereinabove, we find no infirmity in the order passed by the First
Appellate Authority warranting interference by this Tribunal in the
exercise of its appellate jurisdiction. Accordingly, the impugned
order is upheld, and the appeal filed by the Appellant stands
dismissed.
O R D E R
(a) Appeal No. APL/PUN/8/2026 stands dismissed.
Page 17 of 18

(b) The Order-in-Appeal dated 07.01.2026, passed by the
Appellate Authority, Joint Commissioner of State Tax, Pune
Division–2, Pune, in First Appeal No. G-429/
AD271225002622J/2025-26, is hereby upheld.
(Final Order pronounced in the open court on 29.10.2026)
SHRIDHAR
MAHADEO
BHOSALE
Digitally signed by
SHRIDHAR MAHADEO
BHOSALE
Date: 2026.10.29 16:15:59
+05'30'
Digitally signed by
NIRMAL KUMAR SOREN
Date: 2026.10.29
16:17:12 +05'30'
NIRMAL
KUMAR SOREN
(Dr. Nirmal Kumar Soren)
(Shridhar Mahadeo Bhosale)
Member (Technical)
Member (Judicial)
Page 18 of 18

FORM GST APL-04A
[See rule 113(2)]
Summary of the order and demand after issue of order by the Goods and Services Tax
Appellate Tribunal
Whether remand order No
Order Reference No. ZA270221026000130H
Date of order 29.10.2026
1. GSTIN / Temporary ID / UIN 27AAACK7300E1ZZ
2. Appeal Case Reference No. /
Date
APL/8/PUN/2026 dated 24.07.2026
3. Name of the appellant M/s Kirloskar Brothers Limited, Pune
4. Name of the Respondent The Commissioner of State Tax, Maharashtra, Pune
5. Order appealed against
(a) Order Type
(b) Ref. Number / Date
(a)Refund
(b) Order-in-Appeal No. JC/APP-04/G-429 of
25-26/KIRLOSKAR/25-26/Order No.-282 dated 07.01.2026,
passed by the Joint Commissioner of State Tax (Appeal-04), Pune
(arising from Refund Rejection Order in FORM GST RFD-06 No.
ZD271025014751R dated 06.10.2025, passed by the Deputy
Commissioner of State Tax, CANTT_508, Pune)
6. Personal Hearing (all hearing
dates)
29/10/2026 23/10/2026 05/10/2026 18/09/2026 08/09/2026
24/08/2026 11/08/2026
28/07/2026
7. Status of Order under Appeal Order under Appeal is confirmed
8. Order in brief
The Appellant, M/s Kirloskar Brothers Limited, inadvertently paid excess GST of Rs. 91,00,000/- at 12%
instead of 5% in March 2018 and filed a refund claim on 04.07.2025 after discovering the mistake. The claim
was rejected as time-barred under Section 54 of the CGST Act, 2017, and the First Appellate Authority upheld
the rejection on 07.01.2026, holding that the delay could not be condoned. The Appellant challenged the
impugned order before the Tribunal, contending that the limitation period under Section 54 was incorrectly
determined and that the retention of excess tax violated Article 265 of the Constitution, so that the period of
limitation would not apply. This Tribunal held that the Proper Officer and the Appellate Authority have no
power to sanction a refund beyond the period of limitation prescribed under Section 54 of the CGST Act, and
that the delay cannot be condoned by the tax authorities. Accordingly, the rejection of the refund claim is
upheld and Appeal No. APL/8/PUN/2026 stands dismissed.
9. If demand order, then whether demand quantified: No.
10. For other orders and demand orders which are not quantified:
Issues as raised by proper
officer
Issues as determined by
Appellate/Revisional authority
Order by GST Appellate
Tribunal
Determination of the relevant date
and the period of limitation under
Section 54 of the CGST Act, 2017
(relevant date taken as 22.04.2018;
refund claim of Rs. 91,00,000/-
rejected as time-barred).
Determination of the relevant date
and the period of limitation
(relevant date 22.04.2018 under
Explanation 2(h) to Section 54;
claim barred; no power to condone
delay; rejection upheld).
(i) The relevant date was correctly
determined as 22.04.2018. (ii) The
refund claim of Rs. 91,00,000/-
filed on 04.07.2025 is barred by
limitation under Section 54 of the
CGST Act, 2017. (iii) The Proper
Officer and the Appellate
Authority have no statutory power
to sanction a refund beyond the
prescribed period. Rejection
upheld; appeal dismissed.
SHRIDHAR
MAHADEO
BHOSALE
Digitally signed by SHRIDHAR
MAHADEO BHOSALE
Date: 2026.10.29 16:18:01
+05'30'
Shridhar Mahadeo Bhosale
Designation: Member (Judicial)
Jurisdiction :Pune
Place: Pune
Date: 29.10.2026