Refund of Tax Paid Twice by Mistake Cannot Be Denied on Ground of Limitation under Section 54 of the GST Act

Last updated: 25 April 2026

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The Orissa High Court has ruled that taxpayers can claim a refund for tax paid twice by mistake, even if the claim is made after the usual two-year time limit. The court stated that retaining tax collected erroneously violates Article 265 of the Constitution. Therefore, the limitation period under Section 54 of the GST Act does not apply to such cases where tax was paid under a mistaken notion.

Court :
Orissa High Court

Brief :
The Hon’ble Orissa High Court in the case of Rajendra Narayan Mohanty v. Joint Commissioner of State Tax [W.P.(C) No. 2271 of 2026, order dated February 12, 2026] held that refund claimed in respect of tax paid erroneously or under mistaken notion cannot be denied solely on the ground of limitation stipulated in Section 54 of the CGST/OGST Act, as the matter falls within the ambit of Article 265 of the Constitution of India, which mandates that no tax shall be levied or collected except by authority of law. The Court held that where tax has been deposited twice under a mistake, the limitation prescribed under Section 54 of the GST Act is inapplicable, and the State cannot retain such amount.

Citation :
W.P.(C) No. 2271 of 2026, order dated February 12, 2026

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1 Year PLAN - Rs.~~1999~~

1799

(Excl. of GST ₹323)

2 Years PLAN - Rs.~~3499~~

3149

(Excl. of GST ₹566)

BEST VALUE

3 Years PLAN - Rs.~~4999~~

4499

(Excl. of GST ₹809)

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Attached File : 671907_5972_rajendra_narayan_mohanty.pdf

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Judgement posted by

Bimal Jain

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FCA, FCS LLB with21 Yrs of Experience inTaxation Indirect and Direct: Education Qualification: B.Com (Hons) Chartered Accountants Company Secretary LLB Qualified SAP FI/CO Consultants Professional Membership: Chairmanof Indirect Tax Committee of PHD Chamber of Commerce Member of Indirec ... Read more

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