Case: M/s Acrologic Business Solutions Private Limited Vs Assistant Commissioner of Central Taxes (Madras High Court)
Issue
The issue for consideration is if the petitioner was entitled to refund if the petitioner could avail of the exclusion in terms of notification No.13/2022-C.T.
Facts
- The petitioner is a BPO company, which exports services under a LUT, without payment of IGST, and avails of refund of unutilized ITC under Section 16(3) of the IGST Act, 2017 r/w S. 54 of the CGST Act, 2017.
- During the period April 2018 to March 2019, the petitioner exported services to the tune of Rs.10,12,26,441/-. Upon issuing invoices, payments were received under FIRC. Thereafter, the petitioner filed a refund application in respect of unutilized ITC on 04.09.2020.
- Upon receipt of such application, by notice dated 29.09.2020, the petitioner was called upon to show cause as to why a sum of Rs.9,22,424/- towards wrong ITC claim and a sum of Rs.28,050/- under the head ‘Other’ should not be disallowed.
- The petitioner replied to the notice on 08.10.2020 and stated that it was unable to function normally on account of the COVID-19 pandemic. Hence the delay be condoned.
- The appellate authority concluded that the export turnover for the period April 2018 to August 2018 cannot be considered because the same is time barred. Consequently, only the export turnover from September 2018 to March 2019 was considered in the appellate order.
- The petitioner submitted that the period impacted by the COVID-19 i.e. 01.03.2020 to 28.02.2022, was excluded from the limitation period for filing a refund application by a notification issued on 05.07.2022 under No.13/2022-C.T. the time period if computed by permitting the benefit of the above notification, petitioner submitted that the claim for refund is within time.
- The Senior Standing Counsel on behalf of the department, submits that the petitioner should have responded online to the show cause notice dated 29.09.2020 and that the show cause notice indicates that a sum of Rs.9,22,424/- was rejected as a wrong ITC claim. Since the petitioner did not reply in the manner required, it is submitted that the petitioner is not entitled to the disallowed refund claim.
Held
- The notification 13/2022 clearly specifies that the period running from 01.03.2020 to 28.02.2022 is required to be excluded for computation of the period for limitation for filing a refund application under Section 54 of the CGST Act
- If the benefit of the above notification is extended to the petitioner, the refund application dated 04.09.2020 would be within the two-year period, which is to be computed from the relevant date, as per sub-section (1) of Section 54 of the Act
- Apart from concluding that the claim is barred by limitation, no other reason has been mentioned in the order for rejecting the refund claim.
- Held that the appellate order is unsustainable and the department has been directed to refund the sum of Rs.7,34,732/- to the petitioner within a period of two months from the date of receipt of a copy of order.
Authors Comments
The ruling from the hon’ble court presses the importance of empathy by the department towards the honest taxpayers. The department needs to appreciate the crucial fact that extraordinary situations/circumstances need to be handled with extraordinary measures. Further it emphasizes on the importance of the notifications being issued by the board from time to time to provide relief to the taxpayers.