Recently, in a case of BHARAT SANCHAR NIGAM LIMITED Vs UNION OF INDIA & ORS. [W.P.(C) 3550/2023] heard by the Hon’ble Delhi High Court, it was held that once an application for a refund is submitted along with the documents prescribed under Rule 89(2), it should be treated as a complete application. If additional documents or clarifications are sought by way of issuing a Deficiency Memo, the same will not impact the limitation period.

According to Section 54 of the CGST Act, 2017, any person claiming a refund of any tax and interest paid on such tax, or any other amount paid by them, may make an application before the expiry of two years from the relevant date. Rule 90(3) of the CGST Rules, 2017, states that if any deficiencies are noticed, the proper officer shall communicate the deficiencies to the applicant in FORM GST RFD-03 through the common portal electronically, requiring them to file a fresh refund application after rectification of such deficiencies.

It has been observed that applicants submit their refund applications within the stipulated time, but sometimes the department seeks additional documents or clarification through a Deficiency Memo. If the applicant resubmits the refund application after providing additional details, then the department checks the time limit from the resubmitted application. As a result, some refund claims may become time-barred due to delays caused by seeking additional documents or clarifications.

This judgment would be helpful for taxpayers whose refund claims have been rejected as time-barred due to delays caused by seeking additional documents or clarifications.

Original Order can be Downloaded Below: