Case Laws Gajraj Vahan (P.) Ltd. vs. State of Jharkhand

Facts of the Case:

Revenue: 

• The assessee in this case made a payment under the wrong head, and as a result, the revenue authority rejected their refund application on the grounds of limitation.
• The revenue authority argued that the refund claim was barred by the law of limitation as prescribed under Section 54 of the Central Goods and Services Tax Act, 2017.
• They contended that Section 77 of the Act, which governs cases of payment under the wrong head, does not prescribe any specific period of limitation for filing refund claims. 

Petitioner: 

• The petitioner, on the other hand, challenged the order rejecting their refund application through a writ petition. They argued that the revenue authority’s rejection of the refund claim on the grounds of limitation was illegal and contrary to the scheme of the GST Act.
• The petitioner asserted that Section 77 of the Act, which deals with payment under the wrong head, does not impose any time limit for filing refund claims.
• They also cited Circular No. 162/18/2021-GST issued by the CBIC, which extended the limitation period for refund in cases of wrong deposits.
• The petitioner sought a direction to refund the amount paid under the wrong head, along with applicable interest.

Judgement:

• Where assessee had made payment in wrong head and had applied for refund under section 77 which was rejected on ground of limitation, since circular bearing no. 162/18/2021 read with notification no. 35/2021-Central Tax, dated 24.09.2021 provide for extension of limitation of refund in case of wrong deposit, order rejecting refund was to be set aside and department was directed to consider refund application of assessee in lights of latest circular.

Summary:

In the case of Gajraj Vahan (P.) Ltd. v. State of Jharkhand, the assessee made a payment under the wrong head and filed a refund application, which was rejected due to limitation. However, Circular No. 162/18/2021-GST dated 25.9.2021 issued by the CBIC provided an extension of the limitation period for refund in the case of a wrong deposit. The High Court of Jharkhand set aside the order rejecting the refund and directed the department to consider the refund application based on Circular No. 162/18/2021-GST. The court allowed the writ petition, granting the assessee the opportunity to claim the refund within a specified period.

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