Refund Limitation Begins from IGST Payment Date – Not Original CGST/SGST | HC

Case Details: Sai Steel Versus State of Bihar (2025) 33 Centax 178 (Pat.)

Judiciary and Counsel Details

• Rajeev Ranjan Prasad & Shailendra Singh, JJ
• S/Shri Bijay Kumar Gupta & Manish Kumar, Advs. for the Petitioner
• Shri Vikash Kumar, SC-11 for the Respondent

Facts of the Case

The petitioner, a registered assessee under GST, had erroneously treated certain inter-State transactions as intra-State and accordingly discharged tax under CGST and Bihar GST. Upon audit objection, the petitioner subsequently paid the differential liability under IGST. Thereafter, the petitioner filed a refund application seeking return of the amounts wrongly paid under CGST and Bihar GST along with interest. The jurisdictional officer rejected the claim on the ground of limitation, holding that the two-year period prescribed under Section 54 of the CGST Act and Bihar GST Act was to be reckoned from the date on which the tax was originally paid. The petitioner contended that the relevant date for limitation could only commence from the date of payment of IGST, and not from the earlier payment of CGST and SGST, and the matter was accordingly placed before the High Court. 

High Court Held

The High Court held that the computation of limitation under Section 54 of the CGST Act and Bihar GST Act, read with Section 19 of the IGST Act, must commence from the date on which tax was correctly deposited under IGST, and not from the date on which the petitioner had initially paid CGST and SGST by mistake. It observed that the Department of Revenue had erred in reckoning limitation from the date of original payment, since the liability was correctly discharged only upon payment under IGST. The Court further directed that the petitioner was entitled to refund of the wrongly paid CGST and SGST, together with appropriate interest, as provided under the statute. 

List Of Case Cited

Gajraj Vahan (P.) Ltd. v. State of Jharkhand — 2023 (74) G.S.T.L. 417/(2023) 6 Centax 178 (Jhar.)