Relevant Date Under GST Refund Varies By Claim Type; 2019 Amendment Not Retrospective: Delhi High Court

The Delhi High Court has clarified that the determination of the “relevant date” for computing limitation under Section 54 of the Central Goods and Services Tax Act, 2017 (CGST Act) depends on the nature of the refund claimed, and that the 2019 amendment to the provision cannot be applied retrospectively to defeat vested rights of taxpayers.

A Division Bench of Justices Prathiba M. Singh and Shail Jain was dealing with petitions challenging rejection of refund claims for unutilised input tax credit (ITC) on the ground of limitation.

The Court noted that although Section 54 prescribes a uniform limitation period of two years, the starting point of limitation, i.e. the “relevant date”, varies across different categories of refund claims.

The Court undertook a detailed analysis of the statutory scheme under Section 54 and its Explanation (2), observing that different clauses prescribe distinct “relevant dates” depending on whether the claim pertains to exports, deemed exports, services, or unutilised ITC. It held,

“Determination of relevant date under Section 54 of the CGST Act is not uniform - the same depends upon the nature of the transaction and the category of the refund claimed. The statutory scheme…provides a comprehensive framework for identifying the relevant date in diverse transactions, including exports, deemed exports, services, unutilised ITC etc.”

In the context of refund of unutilised ITC, the Court examined Explanation 2(e) to Section 54, which was amended with effect from February 1, 2019. Prior to the amendment, the relevant date was defined as the end of the financial year in which the refund claim arose. Post-amendment, the provision restricts its application and links the relevant date to the due date for furnishing returns in certain cases.

The Court held that the amendment cannot be applied retrospectively to refund claims pertaining to periods prior to its coming into force, as doing so would curtail vested rights of assessees.

Reliance was placed on Babasaheb Keda Shetkari Sahakari Soot Girni limited vs. The State of Maharashtra through its Principal Secretary Finance & Ors. has held that the refund applications pertaining to the period prior to the enactment of the amended provision would not be governed by the amended provision.

Similarly, in Bharat Oil Traders v. Assistant Commissioner and Anr. (2025), the Jammu and Kashmir High Court undertook a detailed analysis of the applicability of the amendment to Explanation 2(e). It was noted that right to claim refund is a vested right of the Petitioner. It was further observed that claiming a refund for a period preceding the amendment cannot be curtailed by the amendment. It was held that the amended provision cannot operate retrospectively so as to take away a vested right of the Petitioner.

The High Court concurred with the views taken by the other High Courts and said,

“On the day when the transaction took place, the statute provided for a specific period of limitation. The said period cannot be curtailed on the basis of a subsequent amendment which came into existence and could not have been in the knowledge of the tax payer.”

As such, the Court set aside the impugned orders rejecting the refund claims as time-barred and directed the authorities to reconsider the claims.

For Petitioner: Advocates N.K. Sharma and Deepak Gautam, Rakesh Kumar

For Respondent: Advocates Aditya Singla SSC CBIC with Arya Suresh Nair, Virender Pratap Singh Charak, Shubhra Parashar and Priya Shukla