HC Set Aside Order Rejecting Subsequent Application on Grounds of Limitation as Initially It Was Filed Before Wrong Authority

Case Details: Darshan Processors v. Union of India - [2024] 165 taxmann.com 165 (Gujarat)

Judiciary and Counsel Details

• Bhargav D. Karia & Niral R. Mehta, JJ.
• Hiren J. Trivedi & Tapan N. Patel for the Petitioner. 
• Raj Tanna, AGP, Ankit Shah, Hirak Shah & Nikunt K. Raval for the Respondent.

Facts of the Case

The petitioner was engaged in textile dyeing and printing. It filed a refund application for refund of accumulated ITC due to inverted duty tax structure. However, as there was some ambiguity in the jurisdictional officer, the petitioner was asked to file fresh application. So, the department issued deficiency memo and show cause notice and ultimately rejected refund application on ground that time limit for filing refund application was two years from due date of filing return. It filed writ petition against the rejection order.

High Court Held

The Honorable High Court noted that the petitioner filed refund application within period of two years and fresh refund application was filed after receipt of deficiency memo. The Court also noted that the original refund application was to be considered as proper refund application within period of limitation and fresh refund application filed pursuant to deficiency memo was to be considered as in continuation of first refund application. Therefore, it was held that the impugned order rejecting refund application was to be set aside and matter was to be restored for fresh consideration.