No Close Shave! Madras HC Favours Gillette’s Subsidiary, Holds GST Refund Claims Were Within Limitation [Read Order]

The Madras High Court has ruled in favour of M/s Gillette Diversified Operations Private Limited (Gillette), holding that its Goods and Services Tax (GST) refund claims were filed within the prescribed limitation period, rejecting the Revenue Department’s contention that they were time-barred.

The case arose when Gillette Diversified, a subsidiary of the global consumer goods giant filed their refund claims for unutilized Input Tax Credit (ITC) amounting to ₹3.1 crore on exports for the periods of July, August, and September 2017. The petitioner initially submitted its refund applications within the two-year period prescribed under the Central Goods and Services Tax (CGST) Act, 2017.

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Subsequently, Gillette was slapped with deficiency memos by the Revenue, who required them to file rectification to their ITC claim. Upon re-submission, the department treated them as fresh applications and rejected them as time-barred, on the basis of Para 12 of Circular No. 125/44/2019-GST dated 18.11.2019, which provided that any refund claim is required to be filed within two years from the relevant date, even if earlier claims were rejected due to deficiencies.

G. Natarajan, appearing for the Petitioner, argued that the department had misinterpreted the law and that the original date of filing, and not the rectification date shall determine the limitation period under Section 54 of the CGST Act.

It was further contended that Para 12 of Circular No. 125/44/2019-GST lacked requisite statutory backing and could not override the provisions of the Act, especially in light of the 2021 amendment to Rule 90(3) of the CGST Rules, which excluded the time spent rectifying deficiencies from the limitation period.

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Conversely, S.Gurumoorthy, appearing for the GST Department defended the department’s stance, asserting that re-submitted claims constituted fresh filings and were rightfully rejected as time-barred.

The Single-Judge Bench of Justice C. Saravanan observed that Para 12 of the Circular cannot override Section 54, and the petitioner’s claims were validly filed within the statutory timeframe. The Court observed that once a refund application is filed within the prescribed period, the issuance of a deficiency memo does not reset the limitation period, and a rectified application must be considered as a continuation of the original claim rather than a fresh filing.

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While setting aside the impugned orders, the Madras High Court held that while Rule 90(3) of the CGST Rules, amended via Notification No. 15/2021-CT explicitly provides that the period spent rectifying deficiencies should be excluded from the limitation period, this provision cannot be applied retrospectively.

To Read the full text of the Order CLICK HERE

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