Refund of Excess GST Paid by Mistake Time-Barred After Two Years: GSTAT Pune

GSTAT Pune upheld rejection of a ₹91 lakh refund of GST charged at 12% instead of 5%, holding the two-year limit mandatory for statutory authorities, following the Karnataka Division Bench in Merck.

GSTAT Pune has held that neither the proper officer nor the appellate authorities under the GST Acts can sanction a refund claimed after the two years allowed by Section 54(1) of the CGST Act, even where tax was paid in excess of the rate legally payable. [Kirloskar Brothers Limited v. Commissioner of State Tax, Maharashtra, 2026-juristway.com-3186-GSTAT(Pune)-GST]

The Bench of Shridhar Mahadeo Bhosale, Member (Judicial), and Dr. Nirmal Kumar Soren, Member (Technical), dismissed the appeal. Shridhar Mahadeo Bhosale wrote the order.

The appellant supplied canned motor pumps to the Department of Atomic Energy and charged 12% on an invoice dated 16 Mar 2018 instead of the concessional 5%. It discovered the error in 2024-25 and applied on 4 Jul 2025 for refund of ₹91,00,000. The claim was rejected as time-barred, the relevant date being 22 Apr 2018, when the GSTR‑3B for March 2018 was filed.

The appellant argued that excess tax is collected without authority of law under Article 265, relying on Rajendra Narayan Mohanty v. CT & GST & Others (Orissa High Court), Delhi Metro Rail Corporation v. Additional Commissioner of CGST (Appeal-II) ((2023) 10 Centax 355 (Del.)) and Mafatlal Industries Ltd. v. Union of India ((1997) 5 SCC 536). It said limitation should run from discovery of the mistake.

The Bench held that a discovery rule has no basis in Section 54, under which the relevant date in residuary cases is the date of payment. It followed the Karnataka Division Bench in Assistant Commissioner of Central Taxes, Bengaluru Versus M/s. Merck Life Science Pvt. Ltd., decided on 17 Mar 2026, which reversed the single judge and held the two-year period mandatory for the proper officer, leaving belated claims to writ jurisdiction under Article 226.

The Bench noted that the High Court decisions relied on were rendered under Article 226. As the Act gives its authorities no power to entertain a late claim, the rejection of the refund was upheld.

2026-juristway.com-3186-GSTAT(Pune)-GST