The relevant date for computation of time limit for the refund to be calculated from the last date of last month of the quarter
Karnataka High Court in Suretex Prophylactics India (P.) Ltd. [2020] 116 taxmann.com 566 (Karnataka) on 05-05-2020
Service Tax Refund of Cenvat credit allowed under Rule 5 of cenvat Credit rules is subject to limitation period mentioned in section 11B of the Central Excise Act by virtue of section 83 of the Finance Act 2014 as well as various notifications specifying procedure, safeguards, conditions and limitations for refund under Rule 5 of Cenvat Credit Rules.
On the lines of section 54 of the GST Act, under the residuary part of the definition of the relevant date, u/s 11B of the Central Excise Act 1944, a refund can not be applied after one year from the relevant date i.e. the last date of payment of tax. Under GST this time period is 2 years.
Neither GST Rule 89(4)/(5) specifies nor pre GST Cenvat Credit Rule 5 specified whether time period of 1 year/2year is to be calculated from the due date of furnishing of return for the relevant tax period or end of relevant month or end of relevant quarter, for which payment of tax is made.
In this context, the High Court has stated that “relevant date for computation of time limit will be the end of the quarter”. In other words, the time limit has to be computed from the “last date of the last month of the quarter” which would be the relevant date for the purposes of examining if the claim is filed within the limitation.
Related Topic:
Service Tax Refund on Flat Cancellation
The above principles may be useful for GST purposes also. Hence applying the above ratio of Karnataka High Court with Notification 35/2020 read with Circular 136/06/2020-GST dtd 03-04-2020, last date of refund application for an entire quarter of Jan-March 18 may get extended to 30-06-2020.
However the same may not apply for the quarter ending December 2017, for which limitation had expired in December 2019, because it has been held by Supreme Court in New India Insurance Co. Ltd. v. Shanti Misra [(1975) 2 SCC 840], that the new law of limitation providing a longer period cannot revive a dead remedy.
