Pradip Kumar vs FALAK INDUSTRIES PRIVATE LIMITED
- Court
- GST Appellate Tribunal
Dated: 06.11.2026
GSTAT
State Bench Delhi
Division Bench Court No. Court I
APL/53/DEL/2026
PRADIP KUMAR .............Appellant
Versus
FALAK INDUSTRIES PRIVATE LIMITED, DIRECTOR, C 1/11
BLOCK C 1 SAFDARJUNG DEVELOPMENT AREA NEW
DELHI DLWED 110016 .............Respondent
Quorum
Hon’ble Sh. Sanjay Kumar Aggarwal, Vice President/Judicial Member
Hon’ble Sh. Rajiv Kapoor, Member (Technical)
Authorized Representative for Appellant
SH. BAJRANG PRASAD MEENA, Ld. AC
Authorized Representative for
Respondent
MS. RIA JAIN, Ld. CA
Form GST APL-04A
[See rules 113(1) & 115]
Summary of the order and demand after issue of order by the GST Appellate Tribunal
whether remand order : No
Order reference no. : ZN510071126000109H Date of order : 06/11/2026
1. GSTIN/Temporary ID/UIN - 07AABCF7034R1Z7
2. Appeal Case Reference no. - APL/53/DEL/2026 Date - 03/02/2026
3. Name of the appellant - Pradip Kumar , [email protected] , 9867224692
1
Name of the respondent -
1. FALAK INDUSTRIES PRIVATE LIMITED , [email protected] ,
9811177786
4.
5. Order appealed against - AD0707240003298
(5.1) Order Type - Refund Order
(5.2) Ref Number - ZD0706250278454 Date - 24/06/2025
Personal Hearing - 06/11/2026 09/10/2026 30/09/2026 08/09/2026 03/09/2026
6.
06/08/2026 23/07/2026 10/07/2026 15/05/2026 07/05/2026
7. Status of Order under Appeal - Confirmed – Order under Appeal is confirmed
Order in brief - (i) the appeal is maintainable, the dispute being one relating to refund
and falling within the exclusions in para 4(iv) of Circular No. 207/1/2024-GST dated
26.06.2024. (ii) the relevant date for the exports of the respondent, which were by sea,
is 06.12.2021, being the date taken by the appellate authority on the basis of the “Let
Export Date” on the shipping bills, which is not in dispute; (iii) the correct extended due
date, after applying the exclusion under Notification No. 13/2022 and paragraph 5(I)
and 5(II) of the judgment of the Hon’ble Supreme Court in In Re: Cognizance for
Extension of Limitation, is 29.02.2024; (iv) refund application 1, dated 22.02.2024, was
filed within the extended period of limitation and was not barred by limitation; (v) refund
application 2, dated 27.03.2024, relates back to, and is a continuation of, the timely
refund application 1, the deficiency memo dated 06.03.2024 not having identified any
deficiency in refund application 1, and has no independent bearing on limitation; and
(vi) the two-year period under Section 54(1) of the Act 2017 is mandatory and the
appellate authority erred in treating it as directory, but this finding does not affect the
outcome, since the claim of the respondent is, in any event, within the statutory period
8.
Summary of Order
9. If demand order then whether demand quantified: No
10. For Other orders and Demand orders which are not quantified:
2
Issues as
raised by
proper
officer
Issues as determined by
Appellate/Revisional
authority
Order by GST Appellate Tribunal
(i) the appeal is maintainable, the dispute being one
relating to refund and falling within the exclusions
in para 4(iv) of Circular No. 207/1/2024-GST dated
26.06.2024. (ii) the relevant date for the exports of
the respondent, which were by sea, is 06.12.2021,
being the date taken by the appellate authority on
the basis of the “Let Export Date” on the shipping
bills, which is not in dispute; (iii) the correct
extended due date, after applying the exclusion
under Notification No. 13/2022 and paragraph 5(I)
and 5(II) of the judgment of the Hon’ble Supreme
Court in In Re: Cognizance for Extension of
Limitation, is 29.02.2024; (iv) refund application 1,
dated 22.02.2024, was filed within the extended
period of limitation and was not barred by
limitation; (v) refund application 2, dated
27.03.2024, relates back to, and is a continuation
of, the timely refund application 1, the deficiency
memo dated 06.03.2024 not having identified any
deficiency in refund application 1, and has no
independent bearing on limitation; and (vi) the two-
year period under Section 54(1) of the Act 2017 is
mandatory and the appellate authority erred in
treating it as directory, but this finding does not
affect the outcome, since the claim of the
respondent is, in any event, within the statutory
period
Erroneous
As per APL-07
refund
Place :DELHI
Date : 06.11.2026
3
FINAL ORDER
1. This appeal has been filed by the Department under Section 112(3) of the
Central Goods and Services Tax Act, 2017 (here -in -after called “the Act
2017”), against Order-in-Appeal No. 276/JC/Central Tax/Appeal-
II/Delhi/2024-25 dated 20.09.2024 (here -in -after called “the impugned
OIA”) passed by the Joint Commissioner (Appeals-II), CGST Delhi (here
-in -after called “the appellate authority”), whereby the appeal of the
respondent was allowed.
2. The impugned OIA had set aside the Order-in-Original dated 29.05.2024
(here -in -after called “the OIO dated 29.05.2024”) passed by the Assistant
Commissioner, CGST Hauz Khas Division, CGST Delhi South (here -in -
after called “the adjudicating authority”), whereby a refund claim of Rs.
6,78,822/- filed by the respondent had been rejected solely on the ground
of limitation.
3. The respondent, M/s Falak Industries Private Limited, 63, K S Market,
Sarvapriya Vihar, South West Delhi, Delhi 110016, a registered person
under GST (GSTIN 07AABCF7034R1Z7), is engaged in the export of
readymade garments to the UAE without payment of tax. It claimed refund
under Section 54 of the Act 2017 of the input tax credit accumulated on
account of such exports for the period October 2021 to December 2021,
amounting to Rs. 6,78,822/- (IGST nil, CGST nil and SGST Rs. 6,78,822/-
).
4. The chronology of the refund applications, as borne out by the record, is as
follows:
(a) 22.02.2024 – original refund application filed (here -in -after called
“refund application 1”);
4
(b) 06.03.2024 – deficiency memo issued in FORM GST RFD-03, stating
that “supporting documents attached are incomplete” ;
(c) 27.03.2024 – fresh application filed after rectification (here -in -after
called “refund application 2”), acknowledged in FORM GST RFD-02 on
09.04.2024;
(d) 15.05.2024 – show cause notice in FORM GST RFD-08 (here -in -after
called “the SCN”) issued (the date is recorded as 16.05.2024 in the OIO
dated 29.05.2024), proposing rejection on the ground that the claim was
time-barred, with a personal hearing fixed for 23.05.2024;
(e) 24.05.2024 – the OIO dated 24.05.2024 rejecting the claim in entirety
as time-barred;
(f) 20.09.2024 – the impugned OIA allowing the appeal.
5. The SCN, issued in FORM GST RFD-08 (the date of the SCN is reflected
as 15.05.2024 in the notice itself and as 16.05.2024 in the OIO dated
29.05.2024), proposed rejection of the refund claim of Rs. 6,78,822/-
(IGST nil, CGST nil and SGST Rs. 6,78,822/-) on a single ground, namely
limitation. The SCN recorded as under:
“As per Notification No.13/2022 – Central Tax dated 5th July
2022 – “(iii) excludes the period from the 1st day of March,
2020 to the 28th day of February, 2022 for computation of
period of limitation for filing refund application under
section 54 or section 55 of the said Act”
As per Circular 125/44/2019 dated 18.11.2019 – “12. It is
also clarified that since a refund application filed after
correction of deficiency is treated as a fresh refund
5
application, such a rectified refund application, submitted
after correction of deficiencies, shall also have to be
submitted within 2 years of the relevant date, as defined in
the explanation after sub-section (14) of section 54 of the
CGST Act.”
Complying with the instruction laid in para 12 of Circular
125/44/2019, and Notification No.13/2022 the above-
mentioned refund is time barred as the taxpayer applied for
the refund on 27.03.2024 after the expiry of extended date of
refund. Therefore, instant refund claim is restricted to Rs. 0/-
in the following manner:”
6. Vide the SCN the respondent was called upon to show cause as to why its
refund claim of Rs 6,78,822/- should not be rejected for reasons cited in
the SCN as mentioned here in above, and was directed to furnish a reply to
this notice within seven days from the date of service of this notice, a
personal hearing before the proper officer was scheduled at 01:00 P.M. on
23.05.2024. It was also stated that if the respondent “fails to furnish a reply
within the stipulated date, the case will be decided ex-parte on the basis of
available records and on merits.”
7. The respondent furnished its reply to the SCN in FORM GST RFD-09, the
relevant portions of which were extracted by the adjudicating authority in
the OIO dated 24.05.2024. The respondent stated as under:
“1. The taxpayer said that the initial application filed was
within period of limitation. The Noticee filed an application
dated 22.02.2024 for the same period with the same amount.
6
3. Further, in respect of the said application a deficiency
memo was issued dated 06.03.2024 mentioning that the
“supporting documents attached were incomplete”.
However, no proper explanation was provided as to which
documents are required by the good office. While in the
process for understanding the requirement of the good office
and arranging for the correct documents, the Noticee
couldn't file a fresh application in the time limit after addition
of the time period as prescribed under proviso to rule 90(3)
of CGST Act, 2017 … However, the Noticee wishes to
mention that the delay in filling of application was of few days
only and a fresh application was filed for the same time
period … on 27.03.2024, which was considered as time
barred by the good office.
.
.
.
5. Pursuant to the above-mentioned judgements and in lieu
of the honest mistake made by the bonafied taxpayer, the
Noticee request the good office to consider our fresh
application.”
8. In the same reply in para 4 , under the heading “Period of limitation under
Section 54(1) directory in nature and it is not mandatory” , the respondent
relied upon Lenovo (India) Pvt. Ltd. v. Joint Commissioner of GST
(Appeals-1), W.P. Nos. 23604, 23605 and 23607 of 2022, decided on
06.11.2023 (Mad.), (2023) 12 Centax 230 (Mad.) (Here in after called
7
“Lenovo”), and ARS Energy Pvt. Ltd. v. Additional Commissioner
(Appeals), Chennai, W.P. No. 17763 of 2020, decided on 28.11.2023
(Mad.), (2023) 13 Centax 300 (Mad.) (Here in after called “ARS Energy”).
9. By the OIO dated 24.05.2024, the adjudicating authority recorded that the
refund application had been filed under Section 54 of the Act 2017 read
with Section 16(3)(a) of the IGST Act, 2017, and that:
“Since the refund claim was accompanied by all relevant
documents as per circular No. 125/44/2019-GST dt.
18.11.19, acknowledgement in Form GST RFD-02 was
issued to the claimant electronically on 09.04.2024.”
10. The adjudicating authority found that the respondent had filed the refund
claim with the correct jurisdictional authority and that it exists at its
principal place of business; that “the party has filed its both monthly
returns GSTR-3B and GSTR-1” for the period October 2021 to December
2021; and that the respondent “is primarily engaged in the business of
export of goods i.e. export of Readymade garments to UAE” , having
debited the amount for which the refund claim was filed in terms of Rule
89(3) of the CGST Rules, 2017 (here -in- after called “the Rules 2017”)
11. On the question of limitation, after reproducing Section 54(1), the
definition of relevant date, notification No. 13/2022-Central Tax dated
05.07.2022 (here -in -after called notification No. 13/2022) and paragraph
12 of Circular No. 125/44/2019-GST, the adjudicating authority recorded
as under:
“Taking the above point in consideration, I find that the said
refund claims as mentioned above is filed after the prescribed
time limit.”
8
.
.
“It is observed that the taxpayer has made claim of refund of
Rs. 6,78,822/- which is not admissible as it was filed after the
expiry of two years from the relevant date.”
.
.
“Complying with the instruction laid in Para 12 of Circular
125/44/2019, and Notification No.13/2022 the above-
mentioned refund is time barred as the taxpayer applied for
the refund on 27.03.2024 after the expiry of extended date of
refund. Therefore, instant refund claim is restricted to Rs. 0/-
”
11. The operative part of the OIO dated 24no.05.2024 reads as under:
“I hereby reject an amount of INR 6,78,822/- (Rupees Six
Lakh Seventy-Eight Thousand Eight Hundred and Twenty-
Two only/-) to M/s FALAK INDUSTRIES PRIVATE
LIMITED having GSTIN: 07AABCF7034R1Z7 … dated 27-
03-2024 on account of Export of Goods/ services -w/o
payment of tax (Zero rated supplies of Goods and Services)
under Section 54 of CGST Act, 2017 read with Section 16 (3)
of IGST Act, 2017.”
12. Aggrieved, the respondent preferred an appeal before the appellate
authority, reiterating the submissions made before the adjudicating
9
authority, and relying upon notification No. 13/2022, the proviso to rule
90(3) of the Rules 2017 and the decision of the Hon’ble High Court of
Madras in ARS Energy (supra).
13. The appellate authority held the appeal to be within the period prescribed
under Section 107(1) of the Act 2017 and recorded that:
“the adjudicating authority had rejected the appellant’s
refund claim merely on single ground of time-barred and the
show cause notice dated 15.05.2024 was also given to the
appellant proposing rejection of their refund claim on the
said ground alone. . .”
14. Holding the case to be covered by clause (a)(i) of Explanation (2) to
Section 54 of the Act 2017, the appellate authority recorded as under:
“I find that the appellant’s case covers under clause 2(a)(i)
as their goods were exported by containers/sea which is
evident from the shipping bills submitted by them along with
their appeal. I find that it is difficult to know about the date
when did the ship, having appellant’s goods, left India.
However, the date of Let Export Order (LEO) can be
construed as the relevant date in identical matters as after
the LEO date, the goods are loaded for clearance. In the
appellant’s case, I find that LEO date, for exporting their
goods, has been mentioned in shipping bills as 06.12.2021.
Therefore, the appellant, in terms of section 54(1), was
required to file refund claim, which arose against said export,
on or before 05.12.2023. However, considering the exclusion
of time period from 01.03.2020 to 28.02.2022 vide
10
Notification No. 13/2022-Central Tax dated 05.07.2022, I
find that:”
15. The appellate authority then tabulated the relevant date as 06.12.2021, the
two years as expiring on 06.12.2023, the period excluded as 06.12.2021 to
28.02.2022 (85 days), the two years as expiring on 01.03.2024 on
considering that period, and the actual date of filing as 27.03.2024. It then
recorded as under:
“7.2 From the above, it is evident that the appellant’s refund
application was delayed by 26 days. However, I find that the
appellant’s initial refund application was filed on 22.02.2024
which was well within time as calculated above. The
appellant was issued a deficiency memo on 06.03.2024. This
period i.e. from the date of refund application till the date of
deficiency memo included 14 days which is also required to
be deducted from the delay of 26 days in terms of proviso to
rule 90(3) of CGST Rules, 2017 …
7.3 After exclusion of period from the date of initial refund
claim till the date of deficiency memo, the appellant’s refund
claim was delayed by 12 days (26 days minus 14 days).
Regarding this delay of 12 days, the appellant has relied upon
the judgment of Hon’ble High Court of Madras in the case of
M/s ARS Energy Pvt. Ltd. vs. Additional Commissioner
(Appeal), Chennai and Others …
7.4 In terms of above judgment, the appellant’s refund claim
cannot be denied merely on the ground of time-barred. In this
context, I find force from the judgment of Hon’ble High Court
11
of Delhi in the case of M/s Bharat Sanchar Nigam Limited vs.
Union of India [W.P.(C) 3550/2023] (Here in after called
“BSNL”) …”
16. Further, the appellate authority recorded as under:
“7.5 I find that the deficiency memo dated 06.03.2024 issued
to the appellant did not mention about the documents which
were incomplete. The said deficiency memo only gave reason
as ‘supporting documents attached are incomplete’ and
therefore such vague reason for issuing deficiency memo
cannot be accepted. I find that the orders of the higher courts
are of binding nature on the subordinate courts and
authorities. Therefore, I hold that the date of appellant’s
initial refund application i.e. 22.02.2024 is to be considered
as date of filing of appellant’s refund claim which was well
within the time limit for filing refund as discussed supra.
8. In view of the above, I find that the adjudicating authority
has erred in rejecting appellant’s refund claim considering
the same as time-barred which is contrary to the statute as
well as judgment pronounced by the Hon’ble High Court of
Delhi in the case of M/s Bharat Sanchar Nigam Limited vs.
Union of India [W.P.(C) 3550/2023] which binding on lower
courts and authorities including this appellate authority. It is
pertinent to mention that the petitioner filed writ petition
before the Hon’ble High Court of Delhi against the order
passed by the then appellate authority and it appears that the
said judgment has not been challenged by the department
before the Hon’ble Supreme Court. As such, the impugned
12
order passed by the adjudicating authority is neither legal
nor maintainable in law and therefore the same is liable to
be set aside.”
17. The operative part of the impugned OIA reads as under:
“9. The appeal filed by M/s Falak Industries Pvt. Ltd. …
against Order-In-Original No. ZI0705240615198 dated
29.05.2024 is hereby allowed. The impugned order dated
29.05.2024 passed by the adjudicating authority is set aside
as discussed supra. The instant appeal is disposed of in terms
of Section 107(12) of CGST Act, 2017.”
18. The impugned OIA, received in the office of the Principal Commissioner
on 23.09.2024, was examined in review under sub-section (3) of Section
112 of the Act 2017 by the Principal Commissioner, CGST, Delhi South,
who, by the Review Order dated 18.03.2025, directed the Deputy/Assistant
Commissioner, Division Hauz Khas, to file the present appeal.
19. Accordingly, the appellant has preferred this appeal on the following
grounds:
a). That the appellate authority held the relevant date to be 06.12.2021,
excluded a period of 85 days in terms of notification No. 13/2022 and a
period of 14 days from the date of the refund application till the date of the
deficiency memo, and still found that a delay of 12 days remained.
b). That on a perusal of Section 54(1) of the Act 2017, the time limit fixed
thereunder is mandatory in nature; the taxpayer was liable to adhere to it
but failed to do so, and the appellate authority himself observed a delay of
12 days even after considering the notification and the period till the date
13
of the deficiency memo; the appellate authority has thus erred in allowing
the appeal of the taxpayer.
c). That, regarding the remaining delay of 12 days, the appellate authority
relied upon the judgment of the Hon’ble High Court of Madras in ARS
Energy (supra), reproducing Lenovo (supra), wherein it was held that the
limitation of two years under Section 54(1) is directory in nature and delay
shall be condoned if reasons are provided.
d). That the order dated 06.11.2023 of the Hon’ble High Court of Madras
in Lenovo (supra) has not been accepted in review by the Puducherry
Commissionerate, and Writ Appeals Nos. 730/2024, 731/2024 and
732/2024 have been filed against it and are still pending; the said order has
not attained finality, and the impugned OIA merits challenge before this
Tribunal.
e). That, in view of the above, the appellate authority has erred in allowing
the appeal filed by the taxpayer, and the impugned OIA is not proper and
legal.
20. The appellant prayed for
(i) Setting aside Order-in-Appeal No. 276/JC/Central Tax/Appeal-
II/Delhi/2024-25 dated 20.09.2024, in view of the grounds of appeal as
above;
(ii) For passing any other order, as the GST Appellate Tribunal, Delhi, may
deem fit and appropriate in the case.
21. In its reply dated 19.07.2026, the respondent has raised the following sets
of submissions:
14
(i) that the appeal is not maintainable, as the disputed tax of Rs. 6,78,822/-
is far below the monetary limit of Rs. 20,00,000/- prescribed for
departmental appeals before this tribunal by circular No. 207/1/2024-GST
dated 26.06.2024, issued after the 53rd GST Council meeting held on
22.06.2024 in furtherance of the National Litigation Policy; that the
circular binds the department and its officers; that none of the exceptions
to the limit is attracted, since the impugned OIA turns on the peculiar facts
of the respondent’s case, and the exception relating to “refunds” is
confined to interpretation of the substantive law governing entitlement to
refund;
(ii) that the appeal raises no question of law, the dispute being purely
factual; that the applicability of Section 54(1) of the Act 2017 and the two-
year limit was never in dispute; that the appellate authority did not decide
that the two-year period is merely directory but made a factual computation
of limitation; and that the core finding in paragraphs 7.5 and 8 of the
impugned OIA rests on the factual characterization of a vague deficiency
memo, applying the binding judgment of the Hon’ble High Court of Delhi
in BSNL (supra);
(iii) that the grounds of the Department’s appeal are built entirely upon
Lenovo and ARS Energy (supra), which was not the only reason for the
decision of the appellate authority; that the appeal is silent on BSNL
(supra), the actual ratio of the impugned OIA, which has been recorded as
not challenged before the Hon’ble Supreme Court and has therefore
attained finality; and
(iv) that, on merits, the entitlement of the respondent to refund under
Section 54(3) of the Act 2017 is not disputed; that refund application 1 filed
on 22.02.2024 was within time; that the vague deficiency memo did not
15
render it non est; that the exclusion under notification No. 13/2022 dated
05.07.2022, read with the suo motu limitation orders of the Hon’ble
Supreme Court, operates in its favour; and that the substantive right of a
bona fide exporter ought not to be defeated on a hyper-technical objection,
no prejudice being caused to the Revenue.
22. In its rejoinder to the reply, the appellant has submitted that:
(i) circular No. 207/1/2024-GST is an administrative
instruction issued under Section 168(1) of the Act 2017 for
the internal guidance of departmental officers, which neither
confers nor curtails the statutory right of appeal under Section
112(3) of the Act 2017 nor the jurisdiction of this Tribunal
circumscribed to entertain an appeal under section 112;
(ii) the appeal raises substantial questions of law, namely
whether the limitation under Section 54(1) is mandatory or
directory, whether a deficiency memo which does not itemise
the deficient documents renders the original application
effective for the exclusion under rule 90(3), and whether the
appellate authority could depart from board own binding
circular No. 125/44/2019-GST;
(iii) the grounds of appeal challenge the entire computation
and conclusion recorded in the impugned OIA, including the
residual delay of 12 days recorded by the appellate authority
itself at paragraph 7.3;
(iv) the mere circumstance that BSNL (supra) has not been
carried in appeal before the Hon’ble Supreme Court does not
make its application to the present facts correct; and
16
(v) the proviso to Rule 90(3) excludes strictly the period
from the date of filing of the refund claim ….till the date of
communication of the deficiencies and the unexplained
residual delay of 12 days in re-filing renders the claim time-
barred on a plain application of the rule.
ISSUES FOR DETERMINATION
23. On a conspectus of the grounds of appeal, the cross-objections and the
counter reply thereto, and the findings recorded in the orders below, the
following issues arise for determination:
I). Whether the appeal is liable to be dismissed in limine as not maintainable,
the disputed tax being below the monetary limit prescribed in Circular No.
207/1/2024-GST dated 26.06.2024, or whether it falls within the exceptions to
that limit?
II). Whether refund application 1 was filed within the period of
limitation prescribed under Section 54(1) of the Act 2017 read with
Notification No. 13/2022, and, in particular, whether the computation of the
appellate authority, leaving a residual delay of 12 days, is sustainable?
I11). What is the effect, if any, of the deficiency memo dated 06.03.2024 on the
date from which limitation is to be reckoned, and whether refund application 2
relates back to refund application 1?
1V). Whether the two-year period under Section 54(1) of the Act 2017 is
mandatory or merely directory?
24. We have heard the parties at length. Sh. Bajrang Prasad Meena, Ld.
Assistant Commissioner argued the matter on behalf of the appellant, and
Ms Ria Jain, Ld. CA argued the matter on behalf of the respondent. We
17
have also perused the record. Their respective submissions may be
summarized as follows:
25. On behalf of the appellant, it was strenuously argued by the Ld. AC that
the impugned OIA is erroneous; that the appellate authority has itself
recorded in the impugned OIA that, after excluding 85 days under
notification No. 13/2022 and 14 days under the proviso to rule 90(3) of the
Rule 2017, a delay of 12 days remains in the filing of refund application 2;
that Section 54(1) of the Act 2017 prescribes a limit of two years from the
relevant date and contains no power of condonation; that the proviso to rule
90(3) of the Rule 2017 is the only statutory relief for a rectified claim and
paragraph 12 of Circular No. 125/44/2019-GST, binding on the appellate
authority, treats a rectified application as a fresh application to be filed
within two years; that Lenovo and ARS Energy (supra) are decisions of a
Single Bench of the Hon’ble High Court of Madras, against which Writ
Appeals are pending, and are not binding in Delhi; that BSNL (supra)
applies only where the original application is not deficient in material
particulars, which the impugned OIA does not record; and that the
monetary limit in Circular No. 207/1/2024-GST is not a bar to the appeal.
26. On behalf of the respondent, it was vehemently argued at the outset that
the appeal is not maintainable, being below the monetary limit and not
falling within any exception. Without prejudice to this objection, it was
further argued that refund application 1 dated 22.02.2024 was in any event
filed within limitation, since notification No. 13/2022 excludes the entire
period from 01.03.2020 to 28.02.2022 and the relevant date falling within
that window, the two-year period could only commence running from
01.03.2022; that the deficiency memo dated 06.03.2024 does not specify
the incomplete documents, so that the respondent could not cure what was
not identified; that refund application 2, filed within about three weeks of
the memo, relates back to refund application 1, which alone is relevant for
18
limitation; that the OIO dated 24.05.2024 did not take the deficiency memo
into consideration at all; that the appellate authority has rightly applied
Lenovo and BSNL (supra) in holding that the date of refund application 1
alone is to be considered, a delay of 12 days being the most that could arise
even if refund application 2 were reckoned from its own date; that no
question of law arises, the impugned OIA resting on the binding judgment
in BSNL (supra); that the delay, if any, is marginal and the substantive right
of a bona fide exporter ought not to be defeated by technicalities; and that
had a notice been issued instead of a deficiency memo, the claim would
not have become time-barred.
27. These rival submissions are considered, issue-wise, in the discussion that
follows.
28. Issue No I
Whether the appeal is liable to be dismissed in limine as not maintainable, the
disputed tax being below the monetary limit prescribed in Circular No.
207/1/2024-GST dated 26.06.2024, or whether it falls within the exceptions to
that limit?
29. At the outset, we shall deal with the submission of the respondent that the
disputed tax of Rs. 6,78,822/- is far below the monetary limit of Rs.
20,00,000/- fixed by circular No. 207/1/2024-GST dated 26.06.2024 for
departmental appeals before this tribunal, and that the appeal is on that
ground alone not maintainable.
30. After hearing the parties at length and going through the record, this
tribunal is unable to accept this contention. The right of the appellant to file
an appeal is conferred by sub-section (3) of Section 112 of the Act 2017,
which empowers the commissioner, where he is of the opinion that an order
passed by the appellate authority is not legal or proper, to direct any officer
19
subordinate to him to apply to this tribunal for determination of such points
arising out of the order. The jurisdiction of this tribunal to entertain an
appeal so filed flows from the Act 2017 itself. In the present case, the
review Order was passed by the Principal Commissioner in the exercise of
the power under sub-section (3) of Section 112 of the Act 2017, and the
appeal has been filed on the direction contained therein.
31. The said circular itself provides that the monetary limits are subject to
certain exclusions, in which the decision to file an appeal is to be taken on
merits irrespective of the said limits. The relevant part of the circular is as
under:
“iv. Where the matter is related to –
1. Valuation of goods or services; or
2. Classification of goods or services; or
3. Refunds; or
4. Place of Supply; or
5. Any other issue, which is recurring in nature and/or involves
interpretation of the provisions of the Act /the Rules/
notification/circular/order/instruction etc;”
The present dispute is a dispute relating to refund and, therefore, falls
squarely within the exceptions as contained in the circular. The submission
of the Ld. CA for the respondent that the exception is confined to the
“substantive law governing entitlement to refund” finds no support in the
language of the circular, which speaks of a matter “related to” refunds
without any such qualification.
32. Even otherwise, the aforementioned clause (e) is attracted in this matter,
as the questions raised in the present appeal relates to true construction of
20
Section 54(1) of the Act 2017 read with notification No. 13/2022, the
proviso to rule 90(3) of the Rules 2017 and paragraph 12 of circular No.
125/44/2019-GST, and the effect of a deficiency memo on the date of filing
of a refund application. Deficiency memos are issued to numerous refund
applicants, and the answer would govern those cases as well. Section
120(1) of the Act 2017 itself empowers the board to issue instructions
fixing monetary limits only “for the purposes of regulating the filing of
appeal or application by the officer of the central tax” , which confirms
that the circular regulates the discretion of the officers and does not touch
the jurisdiction of this tribunal. The maintainability objection raised by the
Ld. CA for the respondent is accordingly rejected.
33. Issue No II
Whether refund application 1 was filed within the period of limitation prescribed
under Section 54(1) of the Act 2017 read with Notification No. 13/2022, and, in
particular, whether the computation of the appellate authority, leaving a residual
delay of 12 days, is sustainable?
34. Sub-section (1) of Section 54 of the Act 2017 provides as under:
“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.”
The expression “relevant date” is defined in Explanation (2)(a) to Section
54 of the Act 2017 and, in the case of goods exported out of India, is as
under:
21
“(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
(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;”
35. This is not in dispute that the exports of the respondent were by sea. The
appellate authority, considered the date on which the ship left India, took
the date of Let Export Order, mentioned in the shipping bills as 06.12.2021,
as the relevant date. This is also not in dispute between the parties, and,
since the ship cannot leave India before the Let Export Order date, no
prejudice arises to either side. The ordinary period of two years from the
relevant date would, on this footing, have expired on 06.12.2023; it may
be noted that the impugned OIA refers also to 05.12.2023.
36. Of central importance to this appeal is notification No. 13/2022 issued
under Section 168A of the Act 2017, clause (iii) whereof “excludes the
period from the 1st day of March, 2020 to the 28th day of February, 2022
for computation of period of limitation for filing refund application under
Section 54 or Section 55 of the said Act” .
This notification extended to refund claims under GST law the benefit of
the Hon’ble Supreme Court’s orders in In Re: Cognizance for Extension of
22
Limitation, Suo Motu Writ Petition (Civil) No. 3 of 2020, by which the
Hon’ble Supreme Court, taking suo motu cognizance of the difficulties
caused by the COVID-19 pandemic, extended the limitation prescribed
under any general or special law in respect of all judicial and quasi-judicial
proceedings for the period 15.03.2020 to 28.02.2022 (orders dated
23.03.2020, 08.03.2021, 27.04.2021, 23.09.2021 and 10.01.2022).
37. It must be emphasized that notification No. 13/2022 does not permit the
limitation clock to run through the specified window; at the very least, no
part of the period from 01.03.2020 to 28.02.2022 can be reckoned against
the applicant. Where, as here, the relevant date itself falls within the
excluded window (06.12.2021 lies between 01.03.2020 and 28.02.2022),
two methods of giving effect to the exclusion are conceivable:
First, to exclude only the days that would otherwise have run between the
relevant date and the end of the excluded window, and to add that number
of days to the normal due date; or,
Second, since no part of the two-year period had even commenced running
before the exclusion came to an end, to treat the full period of two years as
commencing only from the day following the end of the excluded window,
namely 01.03.2022. The appellate authority adopted the first method,
adding 85 days to 06.12.2023 and arriving at 01.03.2024.
38. It is also necessary to set out the statutory provisions governing a refund
application and the intervention of a deficiency memo. Rule 89 of the Rules
2017 prescribes the documents required to accompany a refund
application. Rule 90 of the Rules 2017 governs scrutiny: sub-rule (2)
requires an acknowledgment in within 15 days where the application is
complete; sub-rule (3) requires communication of deficiencies in FORM
23
GST RFD-03, upon which the applicant is required to file a fresh
application after rectification. By notification No. 15/2021-Central Tax
dated 18.05.2021, a further proviso was inserted in Rule 90(3) of the Rules
2017, which is as under:
“Provided also that the time period, from the date of filing of
the refund claim in FORM GST RFD-01 till the date of
communication of the deficiencies in FORM GST RFD-03 by
the proper officer, shall be excluded from the period of two
years as specified under sub-section (1) of section 54, in
respect of any such fresh refund claim filed by the applicant
after rectification of the deficiencies.”
This read with paragraph 12 of Circular No. 125/44/2019-GST dated
18.11.2019, which clarifies that a refiled application is to be treated as a
fresh application but must nonetheless be filed within two years of the
relevant date, constitutes the statutory machinery for computing limitation
where a deficiency memo intervenes.
39. The appellate authority held that refund application 1 filed on 22.02.2024
was well within time, and the appellant has not disputed this in the grounds
of appeal or in its reply. The entire case of the appellant is that a delay of
12 days remains in respect of refund application 2 filed on 27.03.2024. For
the present, it is necessary to ascertain the last date for filing of the refund
application, since limitation under a taxing statute goes to the root of the
claim. The effect of refund application 2 is dealt with under Issue no iv
here in below.
40. It is well settled that there can be no estoppel against a statute and that a
concession or a shifting position on a question of law binds neither the
party who has taken it nor the tribunal before whom it is taken [Thakur
24
Amar Singhji v. State of Rajasthan, (1955) 2 SCR 303 (Constitution
Bench)]. The Hon’ble Supreme Court, in R. Nagaraj (Dead) Through LRs
v. Rajmani, 2025 INSC 478, has reiterated that it is the duty of every court
to ascertain whether a lis has been initiated within the time prescribed by
law, this being a question that may be raised, and must be answered, at any
stage. In Satyendra Kumar v. Raj Nath Dubey, 2016 SCC OnLine SC 478,
the Hon’ble Supreme Court, relying upon Mathura Prasad Sarjoo Jaiswal
v. Dossibai N.B. Jeejeebhoy, (1970) 1 SCC 613, has held that the principle
of estoppel operates against the parties and not against the court, and that
nothing comes in the way of a competent court deciding a pure question of
law correctly; and in National Thermal Power Co. Ltd. v. Commissioner
of Income Tax, (1998) 229 ITR 383 (SC), it was held that a question of law
arising on the facts already on record may be entertained although it was
not raised before the authorities below. The controversy whether the entire
window of exclusion is to be excluded and the period of two years reckoned
afresh after it, or only a part of the days is to be added to the original due
date, is a pure question of law on admitted facts, and this tribunal is bound
to reckon limitation correctly in terms of law, uninfluenced by the manner
in which the parties or the authorities below have computed it.
41. The judgment of the Hon’ble Supreme Court in In Re: Cognizance for
Extension of Limitation, Suo Motu Writ Petition (C) No. 3 of 2020,
decided on 10.01.2022 (2022-VIL-03-SC; (2022) 3 SCC 117), is the
foundation of Notification No. 13/2022-Central Tax, the Act 2017 being a
special law. For ready reference, paragraph 5 of the said judgment,
containing the directions, is reproduced in full hereunder:
“5. Taking into consideration the arguments advanced by
learned counsel and the impact of the surge of the virus on
public health and adversities faced by litigants in the
25
prevailing conditions, we deem it appropriate to dispose of
the M.A. No. 21 of 2022 with the following directions:
I. The order dated 23.03.2020 is restored and in
continuation of the subsequent orders dated 08.03.2021,
27.04.2021 and 23.09.2021, it is directed that the period from
15.03.2020 till 28.02.2022 shall stand excluded for the
purposes of limitation as may be prescribed under any
general or special laws in respect of all judicial or quasi-
judicial proceedings.
II. Consequently, the balance period of limitation remaining
as on 03.10.2021, if any, shall become available with effect
from 01.03.2022.
III. In cases where the limitation would have expired
during the period between 15.03.2020 till 28.02.2022,
notwithstanding the actual balance period of limitation
remaining, all persons shall have a limitation period of 90
days from 01.03.2022. In the event the actual balance period
of limitation remaining, with effect from 01.03.2022 is
greater than 90 days, that longer period shall apply.
IV. It is further clarified that the period from
15.03.2020 till 28.02.2022 shall also stand excluded in
computing the periods prescribed under Sections 23 (4) and
29A of the Arbitration and Conciliation Act, 1996, Section
12A of the Commercial Courts Act, 2015 and provisos (b) and
(c) of Section 138 of the Negotiable Instruments Act, 1881
and any other laws, which prescribe period(s) of limitation
for instituting proceedings, outer limits (within which the
26
court or tribunal can condone delay) and termination of
proceedings.”
42. The judgment of the Hon’ble High Court of Andhra Pradesh at Amaravati
in M/s MC Wane India Private Limited v. State of Andhra Pradesh &
Others, Writ Petition No. 26816 of 2024, decided on 11.03.2026 (2026:
APHC:13141), which adopts the first method of computation, has also
been taken note of by us. The relevant part of the said judgment is as under:
“7. It is the admitted case of both sides that the relevant date,
under Section 54, for the present case, is 29.08.2021. In the
normal course, the application would have to be filed on or
before 28.08.2023, inasmuch as the period of limitation,
under Section 54, is two years from the relevant date.
8. The Judgment of the Hon’ble Supreme Court as well as the
notification, mentioned above, clearly stipulate that the
period from 01.03.2020 to 28.02.2022 should be excluded
while including the period of two years mentioned in Section
54. In the present case, the period of limitation would
commence only from 29.08.2021. However, this would mean
that the period from 29.08.2021 to 28.02.2022 would have to
be excluded. Once this period is excluded, the limitation
would commence only from 28.02.2022. In such
circumstances, the last date for filing the application would
be 27.02.2024.”
43. We have taken care of the judgments referred to above. This Tribunal is
here for delivery of justice, and for the implementation of the exclusion
period in terms of the desired intent of the Hon’ble Supreme Court in In
Re: Cognizance for Extension of Limitation (supra) as well as the desired
27
intent of notification No. 13/2022 in its letter and spirit. The Hon’ble Apex
Court has categorically mentioned in paragraph 5(III) of its judgment that
where the limitation would have expired during the period between
15.03.2020 and 28.02.2022, all persons shall have a limitation period of 90
days from 01.03.2022, or the longer balance period, if any. Meaning
thereby, this period of 90 days is applicable only where the period of
limitation had expired within the exclusion window.
44. In the present matter, this is not the case, as the period of limitation as per
Section 54 of the Act 2017 commenced only from the relevant date, i.e.,
06.12.2021, and the normal period of two years was not to expire within
the exclusion window. Accordingly, paragraph 5(I) of the judgment In Re:
Cognizance for Extension of Limitation (supra) is applicable, and the entire
period till 28.02.2022 stands excluded. The same result follows from
notification No. 13/2022, which excludes the period from 01.03.2020 to
28.02.2022 in computing the period of limitation under Section 54 of the
Act 2017, the relevant date of 06.12.2021 falling within that window as
well. The last date for filing the refund application is arrived at as
hereinafter discussed.
45. Section 54(1) of the Act 2017 provides for an application for refund to be
made before the expiry of two years “from the relevant date” . Section 9 of
the General Clauses Act, 1897, which applies to the Act 2017, provides
that for the purpose of excluding the first in a series of days or any period
of time, the word “from” is to be used, and, for the purpose of including
the last, the word “to” . Thus, the day which is the relevant date, i.e.,
06.12.2021, from which the period is to be reckoned, is to be excluded, and
the period must be reckoned from the next day, i.e., 07.12.2021. Section
12(1) of the Limitation Act, 1963 embodies the same principle.
46. The entire period from 07.12.2021 till 28.02.2022 being excluded, as no
part of the two years had run, the balance period of limitation which, in
28
terms of the judgment In Re: Cognizance for Extension of Limitation
(supra), became available with effect from 01.03.2022, is the full period of
two years. The period of two years is, therefore, to be reckoned with
01.03.2022 as its first day, 28.02.2022 being the last day of the exclusion.
47. Under Section 3(66) of the General Clauses Act, 1897, a year means a year
reckoned according to the British calendar. The two years beginning on
01.03.2022 thus comprise the period from 01.03.2022 to 29.02.2024, both
days inclusive (365 days and 366 days, i.e., 731 days in all), the next day,
i.e. 01.03.2024, being the corresponding date on which the period of two
years stands completed. The last date for filing the refund application is,
accordingly, 29.02.2024, in terms of notification No. 13/2022 as well as
paragraphs 5(I) and 5(II) of the judgment of the Hon’ble Apex Court In
Re: Cognizance for Extension of Limitation (supra).
48. With due respect, we do not deem appropriate to dwell upon to adopt a
different computation for the dictum as laid down in the judgment of the
Hon’ble Andhra Pradesh High Court in M/s MC Wane India Private
Limited (supra), in view of paragraphs 5(II) and 5(III) of the judgment of
the Hon’ble Supreme Court in In Re: Cognizance for Extension of
Limitation (supra), under which the balance period becomes available only
with effect from 01.03.2022. In any case, nothing turns on the difference
in the present matter, since refund application 1 was filed on 22.02.2024,
which is within time even on the computation of the Hon’ble Andhra
Pradesh High Court (last date 27.02.2024), on the computation of the
appellate authority (01.03.2024), and on the computation which we have
found to be correct (29.02.2024).
49. In view of the above, we hold that refund application 1, filed on
22.02.2024, was filed within the period prescribed under Section 54(1) of
the Act 2017 as extended in terms of the judgment of the Hon’ble Supreme
Court and Notification No. 13/2022. The residual delay of 12 days
29
recorded by the appellate authority arises only if refund application 2 is
treated as a fresh application, and that is the question to which we are now
switching to. Issue No III is answered accordingly, in favour of the
respondent.
50. Issue No III
What is the effect, if any, of the deficiency memo dated 06.03.2024 on the date
from which limitation is to be reckoned, and whether refund application 2 relates
back to refund application 1?
51. Having held that refund application 1, filed on 22.02.2024, was filed
within the period of limitation, we shall now turn to the effect of the
deficiency memo dated 06.03.2024. The Ld. AC for the appellant
contended that refund application 2, filed on 27.03.2024 after rectification,
and hence is a fresh application; that, in terms of the third proviso to Rule
90(3) of the Rules 2017 and paragraph 12 of circular No. 125/44/2019-
GST, binding on the appellate authority under Section 168(1) of the Act
2017, only the period from the date of refund application 1 till the date of
the deficiency memo is to be excluded; and that, so reckoned, refund
application 2 is delayed by 12 days. The Ld. CA for the respondent, on the
other hand, contended that the deficiency memo did not identify any
deficiency and was vague, that refund application 2 is a continuation of
refund application 1, and that the appellate authority has rightly relied upon
the judgments of the Hon’ble High Court of Delhi.
52. Section 54(1) of the Act 2017 requires an application for refund to be made
before the expiry of two years from the relevant date “in such form and
manner as may be prescribed” . The form and manner of the application
and the documents which are to accompany it are prescribed by Rule 89 of
the Rules 2017, and its scrutiny by Rule 90 of the Rules 2017 thereof, as
already noticed hereinabove. Before the appellate authority, and again
30
before us, the respondent has relied upon decisions of various Hon’ble
Superior Courts for the proposition that, where a refund application is
followed by a deficiency memo, the date of the original application and not
the date of the refiled application is to be treated as the relevant reference
point for computing limitation. This line of authority is well established.
53. In M/s Durgambika Traders v. The Union of India, decided on 14
November 2025, the Hon’ble Karnataka High Court in W.P. 5131/2024
held that;
“ii) The petitioner is reserved liberty to file a fresh/new
refund application along with relevant documents within a
period of 6 weeks from the date of receipt of a copy of this
order.
iii) It is further directed that pursuant to the petitioner filing
fresh/new refund application along with relevant documents
before the respondents, the respondents shall
construe/consider/treat the fresh/new refund application to
be filed by the petitioner as if the same was filed on
03.05.2023 on which date the first refund application was
filed by the petitioner and by excluding the entire period from
03.05.2023 till the date of filing the fresh/new refund
application for the purpose of limitation under Section 54 of
the CGST Act.
iv) Along with fresh/new refund application, the liberty is
reserved in favour of the petitioner to file
pleadings/documents etc., in support of his claim.
31
v) Pursuant to the petitioner filing the fresh/new refund
application, the concerned respondent shall consider the
refund claim of the petitioner and pass appropriate orders
together with the claim of interest put forth by the petitioner
in accordance with the provisions contained in Section 54 of
the CGST Act read with Rule 89 of the CGST Rules as
expeditiously as possible within a period of three months
from the date of petitioner filing fresh/new refund
application.”
54. The Hon’ble Jammu & Kashmir High Court in M/s Hallmark v. Jammu
and Kashmir Goods and Services, decided on 25 September 2024, W.P.(C)
2025/2020, has held that;
“18. What is held by a Division Bench of the High Court of New Delhi
in paragraph-25 of WP(C) 871/2022, decided on 09.08.2023, in case,
titled as, National Internet Exchange of India vs Union of India &
ors., is relevant to reproduce hereunder:
“25. As noted above, in terms of Section 54(1) of the CGST
Act, an application is required to be made in the prescribed
form and manner before two years from the relevant date. It
is clear that the petitioner had complied with the said
requirement inasmuch as it had filed an application for
refund on 31.10.2019 in the “form and manner” as
prescribed in the CGST Act and the CGST Rules. Thus, in
terms of Section 54(1) of the CGST Act, the period of
limitation would stop running notwithstanding that the
proper officer required further documents or material to
32
satisfy himself that the refund claimed was due to the
petitioner.”
19. Similarly, what is held by a Division Bench of the High Court
of New Delhi in paragraphs-27, 28 & 29 of WP(C) 3550/2023, decided
on 06.04.2023, in case, titled as, Bharat Sanchar Nigam Limited vs
Union of India & ors., is also relevant to reproduce hereunder:
“27. It is pointed out that the Adjudicating Authority had
proceeded on the basis that it had communicated the
deficiencies in Form GST RFD 03 on 31.01.2020
electronically and the said deficiency was resolved after the
expiry of two years as stipulated in Section 54 of the CGST
Act. The Adjudicating Authority had referred to Rule 90(3) of
the Rules and had proceeded on the basis that the said Rule
provides for filing of a fresh refund application after
rectification of deficiencies. And, the date for filing the fresh
application was required to be considered for the purpose of
limitation.
28. We are of the view that Rule 90(3) cannot be applied
in the manner as sought to be done by the Adjudicating
Authority. Merely because certain other documents or
clarifications are sought by way of issuing a Deficiency
Memo, the same will not render the application by a taxpayer
as non est.
29. If the application filed is not deficient in material
particulars, it cannot be treated as non est. If it is
accompanied by the “documentary evidences” as mentioned
in Rule 89(2) of the Rules, it cannot be ignored for the
33
purposes of limitation. The limitation would necessarily stop
on filing the said application. This is not to say that the
information disclosed may not warrant further clarification,
however, that by itself cannot lead to the conclusion that the
application is required to be treated as non est for the
purposes of Section 54 of the CGST Act. It is erroneous to
assume that the application, which is accompanied by the
documents as specified under Rule 89(2) of the Rules, is
required to be treated as complete only after the taxpayer
furnishes the clarification of further documents as may be
required by the proper officer and that too from the date such
clarification is issued.”
55. The Hon’ble High Court of Karnataka recently, in Homag India Private
Limited v. Joint Commissioner (Writ Petition 27378/2025), has held as
under;
“5. In the instant case, the undisputed material on record will
indicate that the petitioner initially filed a refund application
on 04.07.2024 which was well within the prescribed period
as contemplated under Section 54(3) of the CGST Act and it
was that date on which the petitioner filed the refund
application has to be considered for the purpose of
computing period of limitation and not subsequent revised
refund application filed by the petitioner pursuant to the
deficiency memo issued by the respondents, which is clearly
incorrect and consequently, the said finding recorded by the
respondents is erroneous and matter deserves to be
quashed.”
34
Therefore, it is clear that a rectified application filed thereafter is a
continuation of, and not a substitute for, the original claim.
56. We respectfully agree with and adopt the principle underlying this line of
authority. A genuine, bona fide rectification of deficiencies carried out
pursuant to a deficiency memo does not give rise to a fresh cause of action
or a fresh limitation period; it relates back to, and is treated as a
continuation of, the original application. The judgments of the Hon’ble
High Court of Delhi in National Internet Exchange of India and Bharat
Sanchar Nigam Limited (supra) are, moreover, binding on the authorities
and on this tribunal functioning within its territorial jurisdiction.
57. However, the doctrine of relation-back recognized in this line of authority
operates only where the original application was itself filed within the
period of limitation prescribed under Section 54(1) of the Act 2017, as
extended by notification No. 13/2022. In each of the decisions referred to
above, the assessee’s original application was admittedly within time, and
it was only the subsequent, deficiency-memo-driven application that the
department sought, erroneously, to treat as the relevant date for limitation.
The doctrine of relation-back cures the effect of an intervening deficiency
memo upon an otherwise claim not barred by limitation; it cannot cure an
antecedent infirmity in the limitation of the original claim itself. In the
present case, as already held, refund application 1 was filed on 22.02.2024,
i.e., before the last date of 29.02.2024, and the condition for the application
of the doctrine is therefore satisfied.
58. The deficiency memo dated 06.03.2024 stated only that “supporting
documents attached are incomplete” . The appellate authority has recorded
in the impugned OIA that the deficiency memo did not mention which
documents were incomplete. The adjudicating authority has not recorded
any specific finding to the effect that refund application 1 was deficient in
35
any material particular. The SCN and the OIO dated 29.05.2024 are
founded exclusively on limitation. The appellant, who was asked by the
appellate authority to furnish para-wise comments on 08.07.2024, but did
not respond, has not pointed out, even before us, what material particular
was missing from refund application 1. In these circumstances, the
principle laid down in paragraphs 28 and 29 of Bharat Sanchar Nigam
Limited (supra) squarely applies, and refund application 1 cannot be
treated as non-est merely because a memo seeking unspecified further
documents was issued.
59. The submission of the Ld. AC for the appellant that the respondent
understood and cured the deficiency, as is evident from its re-filing within
about three weeks, does not advance its case. A taxpayer who responds
promptly to a deficiency memo cannot be penalized for his diligence, and
a rectification so made is precisely the bona fide rectification to which the
above principle applies. The explanation of the respondent in its reply to
the SCN, that it was understanding the requirement and arranging the
correct documents, itself bears out its bona fides.
60. The residual delay of 12 days on which the whole case of the appellant
rests, arises only if refund application 2 is treated as a fresh application.
Since refund application 2 is a continuation of refund application 1, the
date of filing for the purposes of limitation is 22.02.2024, and no question
of any delay arises.
61. Issue No III is accordingly answered in favour of the respondent.
62. Issue No IV
Whether the two-year period under Section 54(1) of the Act 2017 is mandatory
or merely directory?
36
63. The appellate authority in the impugned OIA, has relied upon the
judgment of the Hon’ble High Court of Madras in ARS Energy (supra),
which in turn reproduces Lenovo (supra), in the following terms:
“11. Recently, this court had passed an order in
W.P.No.23604 of 2022 dated 06.11.2023 [M/s Lenovo (India)
Pvt. Ltd., vs. The Joint Commissioner of GST (Appeals-1) and
others], wherein it has been held that the fixation of limitation
for making refund application is only directory in nature and
the same is not mandatory. Accordingly, the limitation of 2
years, which was provided under section 54(1) of Goods and
Services Tax Act, 2017, is directory in nature. In such case,
if any reasons were provided for delay in filing the refund
application, the same shall be considered and the said delay
shall be condoned by the respondent.”
64. The appellant contends that the Madras decisions have not been accepted
by the department, and that Writ Appeals Nos. 730/2024, 731/2024 and
732/2024 against Lenovo (supra) are pending and the said decision has not
attained finality. The respondent, relying on the use of the word “may” in
Section 54(1), supports the view taken by the appellate authority, and
further submits that a substantive right of a bona fide exporter ought not to
be defeated on a hyper-technical objection.
65. We are unable to endorse the view that the period of two years prescribed
by Section 54(1) of the Act 2017 is merely directory. This distinction is
reinforced by the settled position of the Hon’ble Apex Court that limitation
periods under special fiscal statutes are to be strictly construed and are not
ordinarily susceptible to relaxation on equitable grounds, however
marginal the delay. In Mafatlal Industries Ltd. v. Union of India, (1997) 5
SCC 536, a Constitution Bench of the Hon’ble Supreme Court held that a
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claim for refund of duty under a fiscal statute must be made, and can only
be made, within the four corners of that statute and cannot be pursued
outside the statute on general principles of equity or under the ordinary law
of limitation.
66. In another matter, Assistant Commissioner (CT), LTU, Kakinada v. Glaxo
Smith Kline Consumer Health Care Ltd., (2020) 19 SCC 681, the Hon’ble
Supreme Court held that where a special statute prescribes its own
limitation without expressly conferring a power to condone delay beyond
it, neither the authorities under that statute nor even a High Court in writ
jurisdiction can extend that period, as doing so would render the specific
statutory limit otiose. This principle is reflected also in the decision of the
Hon’ble Supreme Court in Commissioner of Customs & Central Excise v.
Hongo India (P) Ltd., (2009) 5 SCC 791, and in Singh Enterprises v.
Commissioner of Central Excise, (2008) 3 SCC 70, both holding that
where a taxing statute is a complete code prescribing a specific period, with
at best a limited power of condonation, the authorities constituted under it
cannot travel beyond that period by resort to Section 5 of the Limitation
Act, 1963. The Hon’ble Supreme Court has further held, in VKC Footsteps
India (P) Ltd. v. Union of India, (2021) 4 SCC 705, that a refund under
GST law is in the nature of a statutory concession, to be claimed strictly in
accordance with the conditions, form and procedure prescribed by the
statute itself.
67. The law declared by the Hon'ble Supreme Court in the decisions noticed
above holds the field under Article 141 of the Constitution of India, and
those decisions require that a limitation prescribed by a special fiscal
statute governing refund be strictly construed. With the greatest respect to
the Hon'ble High Court of Madras in Lenovo and ARS Energy (supra)
which has taken the view that the period under Section 54(1) of the Act
2017 is directory, the correctness of that view is itself the subject matter of
38
pending Writ Appeals as claimed by the appellant. In the light of the
decisions of the Hon'ble Supreme Court noticed above, we find ourselves,
with utmost respect, unable to adopt the dictum of Hon'ble High Court of
Madras for the purposes of the present case. No provision of the Act 2017
confers on the proper officer or on the appellate authority a power to
condone delay in filing a refund application. It was therefore not incumbent
upon the appellate authority to conclude that the appellant’s refund claim
can’t be denied merely on the ground of time barred.
68. The above error does not, however, affect the final outcome. As held under
Issue Nos II and III, refund application 1 was filed within time and refund
application 2 is its continuation, so that there is no delay which requires to
be condoned. The conclusion of the appellate authority that the claim of
the respondent cannot be rejected as time barred, resting as it does on
Bharat Sanchar Nigam Limited (supra) is sustained for the reasons
recorded in this judgment.
69. Issue No IV is accordingly answered partly in favour of the appellant, in
that the limitation under Section 54(1) of the Act 2017 is held to be
mandatory and not directory; this finding does not, however, affect the
outcome, since the refund claim of the respondent is, in any event, within
the statutory period.
CONCLUSION
70. For the reasons recorded above:
(i) the appeal is maintainable, the dispute being one relating to refund and
falling within the exclusions in para 4(iv) of Circular No. 207/1/2024-GST
dated 26.06.2024.
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(ii) the relevant date for the exports of the respondent, which were by sea, is
06.12.2021, being the date taken by the appellate authority on the basis of
the “Let Export Date” on the shipping bills, which is not in dispute;
(iii) the correct extended due date, after applying the exclusion under
Notification No. 13/2022 and paragraph 5(I) and 5(II) of the judgment of the
Hon’ble Supreme Court in In Re: Cognizance for Extension of Limitation,
is 29.02.2024;
(iv) refund application 1, dated 22.02.2024, was filed within the extended
period of limitation and was not barred by limitation;
(v) refund application 2, dated 27.03.2024, relates back to, and is a
continuation of, the timely refund application 1, the deficiency memo dated
06.03.2024 not having identified any deficiency in refund application 1, and
has no independent bearing on limitation; and
(vi) the two-year period under Section 54(1) of the Act 2017 is mandatory
and the appellate authority erred in treating it as directory, but this finding
does not affect the outcome, since the claim of the respondent is, in any
event, within the statutory period.
ORDER
71. In view of the foregoing, the appeal filed by the appellant/department
stands dismissed.
No order as to costs.
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Announced in the open court.
Sanjay Kumar Aggarwal
(Vice President/ Member Judicial)
Rajiv Kapoor
(Member Technical Centre)
GST Appellate Tribunal, Delhi State Bench, New Delhi
Place: New Delhi
Date: 06.11.2026
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