- 1 - HC-KAR NC: 2025:KHC:54093 WP No. 24053 of 2023 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 17TH DAY OF DECEMBER, 2025 BEFORE THE HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 24053 OF 2023 (T-RES) BETWEEN: CELEBRITY STRUCTURES INDIA PRIVATE LIMITED A COMPANY GOVERNED BY THE COMPANIES ACT, 2013, AND HAVING ITS OFFICE AT NO. 810, BILWAPRIYA PLATINA APARTMENTS, 27TH MAIN ROAD, H.S.R LAYOUT, SECTOR 1, BENGALURU - 560 102. REPRESENTED HEREIN BY ITS DIRECTOR, SHRI. P. SURENDER REDDY. …PETITIONER (BY SRI. SANDEEP HUILGOL, ADVOCATE) AND: 1. THE ASSISTANT COMMISSIONER OF CENTRAL TAX SOUTH DIVISION 5, BENGALURU A WING, 6TH FLOOR, KENDRIYA SADAN, KORAMANGALA, BENGALURU - 560 034. 2. THE SUPERINTENDENT OF CENTRAL TAX (PREVENTION), BENGALURU SOUTH COMMISISONERATE, CENTRAL REVENUE BUILDING, QUEENS ROAD, BENGALURU - 560 001. Digitally signed by CHANDANA B M Location: High Court of Karnataka - 2 - HC-KAR NC: 2025:KHC:54093 WP No. 24053 of 2023 3. THE DEPUTY COMMISSIONER OF CENTRAL TAX (HPU) BENGALURU SOUTH COMMISSIONERATE CENTRAL REVENUE BUILDING, QUEENS ROAD, BENGALURU - 560 001. …RESPONDENTS (BY SRIJEEVAN J. NEERALGI, ADVOCATE) THIS WP IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO DECLARING THAT THE REFUND CLAIM DTD 09/02/2023 BEARING ARN AA290223029829X (ANNEXURE-G2) WAS FILED BY THE PETITIONER IN TIME AND THUS MUST BE SANCTIONED IN FULL AND ETC., THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR ORAL ORDER In this petition, the petitioner seeks the following reliefs: "(i) Declaring that the refund claim dated 09.02.2023 bearing ARN AA290223029829X (Annexure G-2) was filed by the Petitioner in time and thus must be sanctioned in full; (ii) Quashing the impugned order in Form GST RFD-06 dated 18.04.2023 passed by the 1st Respondent under Rule 92 of the CGST Rules, 2017, read with Section 54 of the CGST Act, 2017 (Annexure M), insofar as it rejects the - 3 - HC-KAR NC: 2025:KHC:54093 WP No. 24053 of 2023 refund of Rs.14,24,564/- that was rightly claimed by the Petitioner; (iii) Quashing the impugned order dated 24.07.2023 passed by Respondent No.1 bearing F.No.GEXCOM/TECH/MISC/2347/2023-CGST-RANGE- ASD5-DIV-SD5-COMMRT-BENGALURU(S) and DIN No.20230757YV0000022876/2592 (Annexure R); (iv) Condoning the delay of 3 days in filing the refund claim dated 09.02.2023 bearing ARN AA290223029829X (Annexure G-2); In either case, (v) Directing Respondent No. 1 to forthwith refund in cast the tax and interest to the tune of Rs. 14,24,564/- paid by the Petitioner along with the applicable interest thereon from the date of payment (07.02.2019) till the date(s) on which the said amount of Rs.14,24,564 is refunded to it; and (vi) passing such other or further orders including such orders as to costs as this Hon'ble Court may deem fit in the facts and circumstances of the case, and in the interests of justice and equity." 2. Heard the learned counsel for the petitioner, learned counsel for the respondents and perused the material on record. 3. A perusal of the material on record will indicate that the petitioner filed refund applications on 17.02.2023, to which, respondent No.1 issued notice proposing to grant refund in favour of the petitioner by remitting the same to the electronic credit ledger - 4 - HC-KAR NC: 2025:KHC:54093 WP No. 24053 of 2023 instead of remitting in cash. The petitioner submitted a reply dated 03.04.2023 inter alia specifically stating that he has no objection to grant / sanction refund in its favour by way of remittance to the electronic credit ledger of the petitioner. However, subsequently, the part of the refund in a sum of Rs.14,24,564/- was rejected by respondent No.1 vide the impugned order dated 18.04.2023 on the ground that the same was barred by limitation and the balance was sanctioned / paid in favour of the petitioner. 4. On 04.07.2023, the petitioner sought for rectification of the order dated 18.04.2023 to the extent of rejection of the refund claim and the said rectification request was also rejected by the respondent No.1 vide the impugned order dated 24.07.2023. Aggrieved by the impugned order dated 18.04.2023 at Annexure - M, the petitioner is before this Court by way of the present petition . 5. A perusal of the material on record including the impugned order will indicate that the sole reason assigned by respondent No.1 in rejecting the refund claim of the petitioner is by coming to the conclusion that the same was barred by limitation. - 5 - HC-KAR NC: 2025:KHC:54093 WP No. 24053 of 2023 6. Under identical circumstances, this Court in the case of M/s. Merck Life Science Private Limited v. The Union of India and others in W.P.No.27259/2024 and connected matters dated 07.11.2025, has held as under: 13. Before adverting to the rival contentions, it would be apposite to extract the relevant statutory provisions of CGST Act, IGST Act and CGST Rules, which reads as under: Section 77 of CGST Act, 2017: "77. Tax wrongfully collected and paid to Central Government or State Government. - (1) A registered person who has paid the Central tax and State tax or, as the case may be, the Central tax and the Union territory tax on a transaction considered by him to be an intra-State supply, but which is subsequently held to be an inter-State supply, shall be refunded the amount of taxes so paid in such manner and subject to such conditions as may be prescribed. (2) A registered person who has paid integrated tax on a transaction considered by him to be an inter-State supply, but which is subsequently held to be an intra-State supply, shall not be required to pay any interest on the amount of Central tax and State tax or, as the case may be, the Central tax and the Union territory tax payable." Section 19 of the IGST Act, 2017: - 6 - HC-KAR NC: 2025:KHC:54093 WP No. 24053 of 2023 "19. Tax wrongfully collected and paid to Central Government or State Government. (1) A registered person who has paid integrated tax on a supply considered by him to be an inter-State supply, but which is subsequently held to be an intra-State supply, shall be granted refund of the amount of integrated tax so paid in such manner and subject to such conditions as may be prescribed. (2) A registered person who has paid central tax and State tax or Union territory tax, as the case may be, on a transaction considered by him to be an intra-State supply, but which is subsequently held to be an inter-State supply, shall not be required to pay any interest on the amount of integrated tax payable." Rule 89(1A) of the CGST Rules: 89(1A). Any person, claiming refund under section 77 of the Act of any tax paid by him in respect of a transaction considered by him to be an intra-State supply, which is subsequently held to be an inter-State supply, may, before the expiry of a period of two years from the date of payment of the tax on the inter-State supply, file an application electronically in FORM GST RFD-01 through the common portal, either directly or through a Facilitation Centre notified by the Commissioner: Provided that the said application may, as regard to any payment of tax on inter-State supply before coming into force of this sub-rule, be filed before the expiry of a period of two years from the date on which this sub-rule comes into force." - 7 - HC-KAR NC: 2025:KHC:54093 WP No. 24053 of 2023 14. A plain reading of Section 77(1) of the CGST Act 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. 15. A similar provision exists in the IGST Act which relates to Inter-State supply and Section 19(1) of the IGST Act also contemplates that, if an Integrated Tax on a supply considered by the taxpayer to be an Inter-State supply is subsequently held to be an Inter-State supply, such taxpayer shall be granted refund of the amount of integrated tax so paid in such manner and subject to such conditions as may be prescribed. 16. 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. 17. In this context, it is the specific contention of the petitioner that Rule 89(1A) of the CGST Rules, 2017 and Section 54 of the CGST Act, which provide a period of 2 years is directory and not mandatory. 18. It is also pertinent to note that in the Statement of Objections filed by the respondents in all these petitions, - 8 - HC-KAR NC: 2025:KHC:54093 WP No. 24053 of 2023 the payment in excess made by the petitioner to the Central Authorities, though not contested, have not been disputed by the Central Authorities as can be seen from paragraph No.11 of all respective petitions, one of which (W.P.No.27259/2024) reads as under: 11. It is further submitted that the respondent has not contested that the petitioner has paid Rs.52,63,596/- under IGST Head in excess whereas the same was later discharged under the correct head of CGST and SGST during March 2018. Respondent agrees that the tax was discharged in excess by the petitioner. However, the refund for the said excess payment should have been filed on the portal within due date as applicable as per the CGST Act,2017. Rule 89 of CGST Rules 2017 read with Notification No.13/2022- Central Tax dated 05.07.2022 i.e., within February 2024. The petitioner has failed to ascertain that the excess payment of Rs.69,88,339/- has been made by them towards IGST in time and therefore, they have failed to file the refund application in time. On the other hand, the Department has done the verification as per law, issued a show cause notice to the petitioner, granted a personal hearing, vetted the reply submitted by the noticee in light of the provisions applicable and have reached to a conclusion that the refund claim has been hit by the limitation of time. Accordingly, a speaking order was passed for rejection of the refund of Rs.69,88,339/-. 19. As can be seen from the aforesaid Statement of Objections, payment made by the petitioner towards - 9 - HC-KAR NC: 2025:KHC:54093 WP No. 24053 of 2023 IGST to the Central Authorities have not been disputed by the respondents, who on the other hand only merely contend that the refund claim of the petitioner is barred by limitation. In fact, respondent Nos.2 and 3 also admit that the petitioner had made payment to the State GST Authorities subsequent to the payment made to the Central GST Authorities. It is therefore clear that respondent Nos.2 and 3 have admitted that the petitioner had made such payment in favour of the Central GST Authorities towards IGST prior to making similar payment to the State GST Authorities. 20. As held by the High Court of Madras and the High Court of Andhra Pradesh in the aforesaid judgments, Section 54 of the CGST Act and Rule 89(1A) of the CGST Rules, 2017 have been held to be directory and not mandatory. It is also significant to note that having regard to Article 265 of the Constitution of India, the respondent – Central GST authorities were not entitled to collect IGST form the petitioner, who was not liable to pay the same and consequently, upon the petitioner paying the same amount to the State GST authorities subsequently, the respondent – Centre was not entitled to retain the IGST and consequently, by applying the principles of restitution and unjust enrichment, the respondent – Centre was obligated to refund IGST back to the petitioner. 21. Under these circumstances, I am of the considered opinion that the impugned orders passed by - 10 - HC-KAR NC: 2025:KHC:54093 WP No. 24053 of 2023 respondent No.3 holding that the refund claim is barred by limitation is contrary to facts and law and the same deserves to be set aside by holding that the refund application/claim of the petitioner is within time and is not barred by limitation. 22. The next question that arises for consideration is, as to the grant of refund in favour of the petitioner as sought for in the refund application filed by the petitioner. In this regard, it is pertinent to note that respondent No.3 has not considered the refund claim of the petitioner nor passed any orders on the merits of the refund claim of the petitioner. 23. Under these circumstances, after having held that the petitioner is entitled to refund of the amount undisputedly paid by him towards IGST and having paid exactly the same/identical amount to the State GST Authorities, since respondent No.3 has not passed any orders on merits, I deem it just and appropriate to set aside the impugned orders by holding that the refund claim is not barred by limitation and remitting the matter back to respondent No.3 for passing appropriate orders on the refund application in accordance with law within a stipulated time frame, bearing in mind the observations made in the body of this order. 24. In the result, I pass the following: ORDER - 11 - HC-KAR NC: 2025:KHC:54093 WP No. 24053 of 2023 (i) These petitions are hereby allowed. (ii) The impugned orders bearing No.31/2024-25 dated 27.05.2024; No.29/2024-25 dated 25.05.2024; No.30/2024-25 dated 27.05.2024; No.27/2024-25 dated 25.05.2024; No.28/2024- 25 dated 25.05.2024 passed by respondent No.3 are hereby set aside. (iii) It is held that the refund application/claim of the petitioner is not barred by limitation. (iv) The matters are remitted back to respondent No.3 for passing appropriate orders on the refund application filed by the petitioner, bearing in mind the observations made in the body of this order and in accordance with law, within a period of three (3) months from the date of receipt of a copy of this order." 7. In view of the aforesaid facts and circumstances and the judgment of this Court in the case of M/s. Merck Life Science Private Limited supra, I deem it just and appropriate to set aside the impugned order and remit the matter back to respondent No.1 for reconsideration afresh in accordance with law. 8. In the result, I pass the following: ORDER - 12 - HC-KAR NC: 2025:KHC:54093 WP No. 24053 of 2023 (i) The petition is hereby allowed and disposed of in terms of W.P.No.27259/2024 and connected matters dated 07.11.2025. (ii) The impugned order dated 18.04.2023 is quashed to the extent it rejects the refund of Rs.14,24,564/- (Annexure-M) and the impugned order dated 24.07.2023 (Annexure-R) passed by respondent No.1 is quashed. (iii) It is held that the refund application/claim of the petitioner is not barred by limitation. (iv) The matter is remitted back to respondent No.1 for reconsideration afresh in accordance with law, bearing in mind the orders passed in W.P.No.27259/2024 and connected matters dated 07.11.2025, within a period of three (3) months from the date of receipt of a copy of this order. Sd/- (S.R.KRISHNA KUMAR) JUDGE SJK List No.: 2 Sl No.: 2 Retyped and replaced vide Court order dated 21.01.2026