The Andhra Pradesh High Court allowed a refund on rectification of mistake  Vas the Vodafone was unable to claim Income Tax Credit (ITC) on Integrated Goods and Service Tax (IGST) paid due to an error. Varshan Enterprises, the petitioner is engaged in the business of supplying telecom pipe laying services in the State of Telangana like M/s.Vodafone  Mobile Services Limited, Kandlakoya Village, Medchal Mandal of Telangana State, whose other office is located in Mumbai.

The petitioner erroneously issued two tax invoices covering the said supply of cable laying services to M/s.Vodafone Mobile Services Limited, Mumbai and two other tax invoices in June 2018 declaring the IGST liability. After realising this mistake, the petitioner tried to rectify this mistake in May 2020 but in vain. The GST common portal is not permitting the same, because the time available for rectification of such mistake is only up to 20.10.2019.

The petitioner realized this mistake in May 2020 when M/s.Vodafone Mobile Services Limited, Kandlakoya, refused to pay the GST amount by correspondingly reducing the subsequent supply consideration payable by it.  The petitioner requested the Superintendent of Central GST, Bhimavaram Range to either refund the amount in issue or adjust the same to the existing liabilities. The Superintendent directed the petitioner to follow the Circular CBEC-20/16/04/18-GST, dated 18.11.2019, which relates to Section 54 of the CGST Act. The said letter of the Superintendent of CGST is wholly untenable, which is nothing but illegal, arbitrary and unjustified. The time limit of two years from the date of payment of the amount in issue towards IGST specified in Section 54 of the CGST Act does not apply to the present case It was pleaded that GST refund claims are governed by Section 54(1) of the CGST Act and 89(2) of the Central Goods and Services Tax Rules, 2017 (for short, ‘the CGST Rules’). So, the Central Board of Indirect Taxes and Customs issued the Circular, dated 18.11.2019.

The contention of the petitioner that limitation as specified in Section 54(1) of the CGST Act is of no application and that limitation is to be governed under Section 17(1)(c) of the Limitation Act, 1963 has no merit. As per Section 54 of the CGST Act, any person claiming a refund of any tax and interest, if any, paid on such tax or any other amount paid by him, may make an application before the expiry of two years from the relevant date in such form and manner as may be prescribed. The petitioner contends that the error surfaced only in May 2020 and when they attempted to rectify it, the GST common portal did not permit them to do so. A division bench of Justice C Praveen Kumar and Justice A V Ravindra Babu observed that as the Circular of the year 2019 restricted only electronic filing and as the contention of the respondents that the claim of the petitioner is barred by limitation is not acceptable, the respondents cannot retain the amount, which was paid by the petitioner.

Under the circumstances, we are of the considered view that the petitioner is entitled to the relief.  The Writ Petition is allowed setting aside the communication of the Superintendent of Central GST, Bhimavaram Range vide his Reference in OC No.151/2021, dated 26.02.2021, and directing the petitioner to make an application in manual form for refund of the amount to which he is entitled to and the respondents are directed to pass orders by law, within four (4) weeks