M/s M.R. Overseas v. Union of India & Ors., High Court of Delhi, W.P.(C) 7133/2023 — Refund rejection orders set aside as authorities failed to consider limitation exclusion under COVID-19 notification
Court: High Court of Delhi
Petition No.: W.P.(C) 7133/2023 & CM Appl. 27802/2023
Date of Judgment: 24.05.2023
Category: Refund – Zero-Rated Supply (SEZ) – Limitation – Condonation of Delay
Relevant Provisions: Sections 54 & 55 of CGST Act, 2017; Section 54(14); CBIC Notification No. 13/2022-CT dated 05.07.2022
Facts of the Case (Paras 1–7)
The petitioner, M/s M.R. Overseas, effected zero-rated supplies to SEZ units from August 2017 to March 2018, without payment of IGST and accumulated ITC. The petitioner repeatedly attempted to file the refund claim between 14.08.2020 and 02.04.2021, but was unable due to persistent technical glitches on the GST portal. Ultimately, the refund application in Form RFD-01 was filed successfully on 02.04.2021, which was duly acknowledged by the Adjudicating Authority.
However, a show cause notice dated 13.05.2021 proposed rejection of the claim solely on the ground that it was time-barred under Section 54(14). The petitioner specifically sought condonation of delay, attributing it to COVID-19 disruptions and portal issues, but this request was disregarded. The Adjudicating Authority rejected the claim on 26.05.2021, and the Appellate Authority upheld the rejection on 25.02.2022.
Meanwhile, CBIC Notification No. 13/2022-CT dated 05.07.2022 directed that the period from 01.03.2020 to 28.02.2022 shall be excluded for computing limitation under Sections 54 and 55. The petitioner argued that if this period is excluded, the refund for Feb–March 2018 would fall within limitation, and the claim for Aug 2017–Jan 2018 required reconsideration with reference to statutory return due dates.
Issues for Determination
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Whether the refund claim could be rejected as time-barred without considering the taxpayer’s request for condonation of delay caused by COVID-19 restrictions and portal errors.
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Whether the refund claim required fresh consideration, in light of Notification No. 13/2022-CT excluding the limitation period during COVID-19.
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Whether the authorities acted without judicial application of mind by ignoring the petitioner’s arguments and the impact of statutory return due dates.
Observations of the Court (Paras 6–8)
The Court noted that the COVID-19 exclusion notification had a direct bearing on the computation of limitation for refund claims filed under Sections 54 and 55. It found that neither the Adjudicating Authority nor the Appellate Authority had examined the petitioner’s contention that the period from 01.03.2020 to 28.02.2022 must be mandatorily excluded as per CBIC’s Notification No. 13/2022-CT (para 8).
The Court further observed that the authorities failed to even evaluate the petitioner’s request for condonation of delay, despite the extraordinary circumstances of the pandemic and systemic technical glitches (para 8). Such non-consideration amounted to non-application of mind and vitiated the orders.
Judgment / Verdict (Para 8–9)
The Court set aside the refund rejection order dated 26.05.2021 and the appellate order dated 25.02.2022. It remanded the matter to the Adjudicating Authority to reconsider the refund claim afresh, strictly in accordance with Notification No. 13/2022-CT dated 05.07.2022 and after duly considering the petitioner’s submissions and request for condonation of delay.
The writ petition was allowed.
Summary of Cases Referred (Tabular Form)
No other judicial precedents were cited in the extracted text of the uploaded judgment.
| Case Name | Court | Ratio / Verdict | Relevance |
|---|---|---|---|
| None cited in judgment | — | — | Order based solely on statutory interpretation and COVID-19 Notification. |
Between Fine Lines – Practical Takeaways for Trade / Industry
This judgment reinforces that refund claims rejected purely on limitation grounds during the COVID-19 period are legally unsustainable unless authorities consider the exclusion of limitation mandated by Notification No. 13/2022-CT. Any refund claim filed late due to portal glitches or pandemic disruptions must receive full consideration, and authorities cannot mechanically reject claims without applying the notification, accounting for return filing cycles, or evaluating condonation grounds. Exporters and SEZ suppliers should proactively rely on this precedent to seek reopening or reconsideration of refund rejection orders issued during the pandemic.
Disclaimer – “The above summary is for academic purpose only; not formal legal opinion. Seek professional opinion before application. Author or publisher or website shall not be responsible for any usage in any form.”
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