Desk of CA. Praveen Sharma – 919 Series (CAPS)

Jammu & Kashmir High Court in the case of Bharat Oil Traders

The petitioner, engaged in the business of edible oil and ghee, filed a refund claim of accumulated input tax credit arising due to an inverted duty structure under GST law.

A dispute arose on the question of limitation after the definition of “relevant date” for refund was amended with effect from 01.02.2019, altering the method of computing the two-year period.

The petitioner contended that the amended provision cannot be applied retrospectively to take away refund rights that had already accrued under the earlier law.

The refund application was filed on 02.02.2021, relying on COVID-related relaxation, under which the period from 01.03.2020 to 28.02.2022 stood excluded for limitation purposes.

The Court accepted that refund claims pertaining to February 2018 to December 2018 were within time after applying the COVID exclusion.

For the period July 2017 to January 2018, the Court held that the unamended law would govern, as vested rights cannot be curtailed by a subsequent amendment.

The rejection of refund for January to March 2019 was found to be without proper reasoning, as no clear finding on ineligible inputs was recorded by the department.

Accordingly, the High Court set aside the rejection order and remanded the matter to the department for fresh consideration on merits in accordance with law.

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CAPS