Facts of the case:

In this case, the petitioner challenged the order rejecting its refund application under Section 54(3) of the CGST Act, 2017, and appellate order affirming such rejection. he petitioner also sought a declaration that Rule 90(3) of the CGST and SGST Rules, 2017, which determines the limitation period where a deficiency memo is issued is ultra vires Section 54(3) of the parent Act.

The petitioner relied on the decision of the Gujarat High Court in M/s. Darshan Processors v. Union of India , wherein it was held that the limitation period should be reckoned from the date of the original refund application, and not from the date of a fresh application filed after curing deficiencies. It was contended that the impugned orders failed to consider this interpretation and thereby caused unjust denial of refund.

Issue:

Whether the limitation period under Rule 90(3) of the CGST and SGST Rules is to be calculated from the date of the original refund application or from the date of re-submission after rectifying deficiencies, and whether Rule 90(3) itself is ultra vires Section 54(3) of the CGST Act.

Held that:

The Bombay High Court noted that the impugned orders were passed without the benefit of the subsequent judicial interpretation of Rule 90(3) by the Gujarat High Court in Darshan Processors and other similar rulings.

The Court observed that constitutional challenges to delegated legislation should be considered only when unavoidable, and since the refund issue could be resolved on the basis of existing judicial precedents, there was no need to adjudicate on the vires of Rule 90(3) in the present case. 

Accordingly, the Court set aside the orders and remanded the matter to the proper officer for fresh consideration of the refund claim, after taking into account Darshan Processors and other relevant decisions and directed that the refund application be decided within three months, after providing an opportunity of personal hearing and issuing a reasoned order; and clarified that the question of validity of Rule 90(3) is kept open for future consideration.

This ruling reinforces the interpretation that the limitation period for refund claims under Rule 90(3) must be reckoned from the date of the original refund application, and not from any subsequent re-filing after rectification of deficiencies. The decision ensures substantive justice to taxpayers and prevents procedural lapses from defeating legitimate refund claims.

Case Name: Mukesh Incense Enterprises Pvt. Ltd. Versus The Union of India & Ors. dated 03.11.2025