The Kerala High Court has quashed refund rejection orders and held that the two-year limitation period under Section 54 of the CGST Act for seeking refund of amounts erroneously paid towards Kerala Flood Cess in GSTR-3B (instead of through the correct Form KFC-A) runs from the date on which the correct payment was made, not from the date of the erroneous payment. The ruling by Justice Ziyad Rahman A.A. in WP(C) No. 5521/2026 (Narayanan Manikantan & Co., decided 01.09.2026) follows the court’s own earlier ruling in Pushpagiri Medical Society v. State of Kerala (WP(C) No. 40664/2025, decided 09.01.2026), which had established the principle for Flood Cess refund claims.
The petitioner had paid amounts towards Kerala Flood Cess for August 2019 to May 2020 along with GSTR-3B returns, whereas the payment was required through Form KFC-A. Upon being proceeded against for non-payment, the petitioner remitted the Flood Cess through the correct form on 27.06.2025 and filed the refund application on 30.07.2025. The authority rejected the refund as time-barred. The court applied the principle from the CBIC Circular illustration (Entry 4 of the tabular column in the circular on Section 77 refunds) that the right to claim refund arises on the date on which the applicant makes the correct payment. Since the correct payment was made on 27.06.2025 and the refund application was filed on 30.07.2025, it was well within two years.
- 2026-juristway.com-2586-HC(Kerala)-GST; 2587-HC(Kerala)-GST | High Court of Kerala | WP(C) No. 5521/2026 & WP(C) No. 40664/2025 | January–September 2026