Karnataka HC Quashes GST Refund Rejection, Says Limitation Runs From Original Application, Not Revised Filing

The Karnataka High Court has quashed the rejection of a GST refund claim as time-barred, holding that the limitation period must be computed from the date on which the taxpayer originally applied for the refund and not from a revised application filed after a deficiency memo.

The bench of Justice S R Krishna Kumar observed that, in the instant case, the refund application filed on July 4, 2024 was well within the prescribed limitation period and that a subsequent application filed pursuant to a deficiency memo could not be treated as a fresh filing for the purpose of computing limitation.

“The undisputed material on record will indicate that the petitioner initially filed a refund application on 04.07.2024 which was well within the prescribed period as contemplated under Section 54(3) of the CGST Act and it was that date on which the petitioner filed the refund application has to be considered for the purpose of computing period of limitation and not subsequent revised refund application filed by the petitioner pursuant to the deficiency memo issued by the respondents, which is clearly incorrect and consequently, the said finding recorded by the respondents is erroneous and matter deserves to be quashed,” the court said.

The case arose after the taxpayer filed a refund application on July 4, 2024, within two years from July 26, 2022. The department issued a deficiency memo on July 18, 2024, following which a revised refund application was filed on August 14, 2024.

However, the department rejected the claim on the ground that the August 14, 2024, application was filed beyond the limitation period, a view that was later upheld by the appellate authority.

Setting aside both orders, the court held that the revised application was only a consequence of the deficiency memo and could not reset or alter the statutory limitation period.

Holding the rejection to be legally unsustainable, the bench allowed the writ petition and directed reconsideration of the refund claim on merits without reference to limitation.

Case Title: Homag India Pvt. Ltd. v. The Joint Commissioner of Central Tax Appeals

Citation: 2026 LLBiz HC (KAR) 5

Case Number: WRIT PETITION NO.27378 OF 2025 (T-RES)

Counsel for Petitioner: Advocate Venkatesh G. 

Counsel for Respondent: Aravind V. Chavan