The Rajasthan High court in its recent ruling in the case of M/s Triveni Electrodes has rejected the challenge to the vires of refund provisions under Section 54 of the CGST Act, 2017.
Facts of the Case:
- The petitioner, M/s Triveni Electrodes had claimed for refund of the accumulated credit in the ledger account. The competent authority on such claim issued the impugned communication. One of the grounds proposed for rejecting the refund claim was that the same was time barred.
- The Deptt. however, before passing final order issued this show cause notice and permitted the petitioner to file a reply within 15 days. Accordingly, the petitioner has also filed the reply raising a contention that his refund claim is not subjected to the limitation period. The Deptt. has not yet passed final order on the petitioner’s refund claim.
- The petitioner has challenged the vires of Section 54 of the CGST Act, 2017 and Rajasthan GST Act, 2017 as ultra vires to the Constitution.
Order of Court:
The division bench of Chief Justice Akil Kureshi and Justice Sameer Jain noted that the Supreme Court in the Union of India and others Vs. VKC Footsteps India Pvt. Ltd., 2021 has upheld the vires of the statutory provisions under consideration and had inter-alia held that Refund is not a constitutional right but a statutory right and therefore, the legislature, in its wisdom, and through statute, can decide how the refund is to be granted. Accordingly, the High Court held that the petitioner’s challenge to the statutory provisions must come to an end.
However, at this stage, learned counsel for the petitioner argued that the COVID-related extensions would apply to time limit provisions contained in the statutes for refund also. At this stage, there is neither pleading nor corresponding prayer for declaration to this effect. The court refused to go into this question in the present petition.
The Court held that In view of the facts and material on record, let the Deptt. decide the petitioner’s refund claim bearing in mind the reply of the petitioner. It would be open for the petitioner to raise additional grounds in support of the refund claim by filing a reply within one week from today. If any such further reply is filed, the authority shall take into consideration the same also while taking final decision.
READ / DOWNLOAD ORDER:
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Frah Saeed is a law graduate specializing in the core field of indirect taxes and is the Co-founder of taxwallah.com. She has authored many publications on GST and is into full-time consultancy on GST to big corporates. She as a part of taxwallah.com heads a team comprising of Chartered Accountants and Advocates and plays a key role in our mission to disseminate GST knowledge to all.
