The Jammu and Kashmir High Court in the case of M/S HALLMARK VERSUS JAMMU AND KASHMIR GOODS AND SERVICES TAX DEPARTMENT, JAMMU-1, THROUGH ITS COMMISSIONER, ASSISTANT COMMISSIONER, GOODS AND SERVICES TAX vide Order no. WP ( C ) No. 2025 / 2020 CM No. 7929 / 2020 dated 25.09.2024, has held that once an application is filed within the limitation period, the subsequent submission of documents or clarifications does not render the application time-barred. The Court stated that the second application was not a new application but a continuation of the first one, which was filed within the limitation period. Therefore, the claim could not be rejected as time-barred. The decision of the respondent for not raising the limitation issue in the initial deficiency memo was critised and noted that the objections filed by the respondents were vague and lacked substantive arguments.
Facts of the Case: The petitioner filed its final GST return on 20.09.2018 and submitted a refund application on 08.09.2020, within the two-year statutory period prescribed under Section 54. On 23.09.2020, the respondent issued a deficiency memo, asking for additional supporting documents, but did not raise any issue of limitation. The petitioner submitted a fresh application on 28.09.2020, attaching the required documents. However, the respondent rejected the application on 15.10.2020, citing limitation.
The Petitioner filed the present writ petition concerning the rejection of a GST refund application, which was based on the ground of limitation under Section 54 of the CGST Act, 2017.
It was argued that the original application was filed on 08.09.2020, was within the limitation period and that the subsequent application was in continuation of the original one.
Held that: The Court held that the original application was filed within the statutory limitation period. The follow-up application was in continuation of the original application, and thus the limitation was to be calculated from the date of the first filing i.e. 08.09.2020. The rejection on grounds of limitation was improper since the deficiency memo issued earlier did not mention time-barred claims. The respondents failed to justify their decision adequately in their objections, which were seen as evasive.
The petitioner was not afforded an opportunity to be heard, contrary to Rule 92(3), which mandates such a hearing before rejecting a refund application. The Court allowed the writ petition, quashed the deficiency memo, and directed the respondents to process and release the GST refund with interest at 7%.
To read the complete judgment 2024 Taxo.online 2239
