Tax / Indirect Tax : HC Quashes Tax Department's Order ; Department's Order Found Contrary to Law

Tax / Indirect Tax : HC Quashes Tax Department's Order ; Department's Order Found Contrary to Law

In case of Merck Life Sciences Pvt Ltd v. Union of India [2025] GCtR 1776 (Karnataka), the orders passed by Tax Department holding that the refund claim is barred by limitation was contrary to facts and law and it was set aside by holding that the refund application/claim of the petitioner is within time and is not barred by limitation. 

A plain reading of Section 77(1) of the CGST Act, 2017 will clearly indicate that the taxpayer who pays tax to the Central Authority by oversight, inadvertence and erroneously, would be entitled to refund of the amount of taxes so paid in such manner and subject to such conditions as may be prescribed. Rule 89(1A) of the CGST Rules, 2017 stipulate that the refund claim under Section 77 of the CGST Act and Section 19 of the IGST Act would have to be made within a period of 2 years from the date of payment by filing an application in the prescribed format.