Limitation Period u/s 54(1) of the CGST Act cannot be invoked when tax is collected without authority of law

Last updated: 06 October 2023

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Quick Summary

The Delhi High Court has ruled that the two-year time limit for claiming a refund under Section 54(1) of the CGST Act does not apply when tax has been collected without legal authority. In this case, Delhi Metro Rail Corporation was wrongly made to deposit GST on services that were exempt. Despite filing the refund application after two years, the court directed the Revenue Department to process the refund, stating that the limitation period is irrelevant when the initial tax collection was unlawful.

Court :
Delhi High Court

Brief :
The Hon'ble Delhi High Court in the case of Delhi Metro Rail Corporation Limited vs. The Additional Commissioner, Central Goods and Services Tax Appeals and Others [W.P. (C) 6793/2023 dated September 18, 2023] held that the limitation period of two years under Section 54(1) of the Central Goods and Service Tax Act, 2017 ("the CGST Act") for filing an application for refund of tax, cannot be invoked when Revenue Department collected the tax without any authority of law. Hence the Writ Petition was allowed, and the Revenue Department was directed to process the claim for refund of the Petitioner.

Citation :
W.P. (C) 6793/2023 dated September 18, 2023

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