The Allahabad High Court bench consisting of Justice Surya Prakash Kesarwani and Justice Jayant Banerji observed that the refund application under the Goods and Service Tax (GST) cannot be rejected merely on the ground of delay.

"We find that the refund application of the petitioner could not have been rejected by the respondent merely on the ground of delay, ignoring the order of the Supreme Court," the court said.

The petitioner/assessee filed a refund application for the tax period from April to June, 2018, July to September, 2018 and October to December, 2018, which has been rejected by the department.

As per order passed by the department, the period of limitation for filing refund applications in terms of Section 54(1) of the CGST Act has expired in September, 2020, and even the period extended by the department has also expired on 30.11.2020. The petitioner filed a refund application on March 31, 2021, which has been rejected on the ground of delay.

Counsel for the petitioner submitted that the period between 15.03.2020 and 28.02.2022 has been directed by the Supreme Court to be excluded for the purposes of limitation as may be prescribed under any general or special law in respect of all judicial or quasi-judicial proceedings in a suo-moto writ petition. The refund application has been arbitrarily rejected by the department.

The Supreme Court in the suo-moto writ petition ordered 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 law in respect of all judicial or quasi-judicial proceedings. Consequently, the balance period of limitation remaining as on 03.10.2021, if any, shall become available with effect from 01.03.2022.

The Supreme Court further ordered that in cases where the limitation would have expired during the period between 15.03.2020 and 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 that the actual balance period of limitation remaining with effect from 01.03.2022 is greater than 90 days, that longer period shall apply.