Court rules that amendments to GST refund claims cannot retroactively curtail vested rights, ensuring fair treatment for taxpayers.
In a significant ruling, the Jammu and Kashmir High Court has delivered a judgment favoring Bharat Oil Traders, a firm engaged in the edible oil and ghee business, in its legal battle against the Assistant Commissioner and other respondents regarding Goods and Services Tax (GST) refund claims. The case, WP(C) No. 192 of 2023, was decided by a division bench comprising Justices Mrs. Sindhu Sharma and Shahzad Ajeem.
The crux of the dispute centered around the refund of unutilized input tax credit under Section 54 of the Central Goods and Services Tax Act, 2017, which underwent an amendment changing the definition of the "relevant date" for filing refund claims. The court held that this amendment, effective from February 1, 2019, operates prospectively and does not retroactively affect the taxpayer's vested rights.
The petitioner, Bharat Oil Traders, represented by Advocate Mr. Sachin Sharma, argued that their refund claims for periods between July 2017 and March 2019 were unjustly rejected due to the retrospective application of the amended provisions. The respondents, represented by Advocate Mr. Rohan Nanda, contended that the amendments applied to all claims filed post-amendment.
The court meticulously examined the statutory provisions and emphasized the principle that amendments altering taxpayer rights are presumed to be prospective unless explicitly stated otherwise. It underscored that the right to claim a refund that had already accrued prior to the amendment cannot be curtailed. Consequently, the un-amended definition of "relevant date" should apply to claims for periods before the amendment.
Furthermore, the court acknowledged the impact of the COVID-19 pandemic on limitation periods, referencing CBIC Notification No. 13/2022-Central Tax, which excluded the period from March 1, 2020, to February 28, 2022, from the computation of the limitation period for filing refund applications.
The court found that the petitioner's refund claims for February 2018 to December 2018 were timely, as they fell within the exclusion period. It also noted the absence of a reasoned finding for rejecting claims from January to March 2019 on the grounds of ineligible inputs, remanding the matter for fresh determination.
In conclusion, the judgment reinforces the principle that legislative amendments should not retroactively disrupt established taxpayer rights, ensuring a fair and just process for refund claims under the GST framework.
Bottom Line:
GST Law - Refund of unutilized input tax credit under Section 54 of CGST Act, 2017 - Amendment changing the "relevant date" for refund claims operates prospectively and not retrospectively - Vested rights cannot be curtailed by retrospective application of statutory amendments.
Statutory provision(s): Goods and Services Tax Act, 2017 Section 54, CBIC Notification No. 13/2022-Central Tax
Bharat Oil Traders v. Assistant Commissioner, (Jammu And Kashmir)(DB) : Law Finder Doc Id # 2833320
