Limitation period under section 54 of the CGST Act is mandatory for refund of GST paid under wrong head, but delay can be condoned under writ jurisdiction – Karnataka High Court

In brief

The Karnataka High Court¹ has held that the two-year limitation period prescribed under section 54 of the Central Goods and Services Tax Act, 2017 (CGST Act), for filing refund applications is mandatory and must be strictly applied by departmental officers, who have no statutory power to condone delay. The court has clarified that this bar does not curtail the High Court’s writ jurisdiction under Article 226 of the Constitution to condone any delay in genuine cases, particularly where tax has been paid twice on the same transaction or under a wrong head and the CGST Act does not provide an adequate remedial mechanism. The condonation of delay is subject to the condition that a corresponding extension of time is granted to the proper officer to invoke other applicable provisions, including sections 73 and 74 of the CGST Act, as would have been available if the claim had been timely.