“For startups, refunds are not just cash flows – they are survival. Timely justice ensures businesses don’t bleed while waiting.”

Calcutta HC: Delay beyond statutory limit & irrelevant grounds vitiated GST refund rejection

The Calcutta High Court, in the case of Suraj Mangar v. Assistant Commissioner of West Bengal State Tax (M.A.T. No. 104 of 2024, IA No. CAN 1 of 2024, decided on 30-07-2025), clarified that delays and irrelevant grounds cannot be a basis for rejecting GST refund claims.

📌 Facts of the Case:

• Refund application filed for Feb–Aug 2021.

• Acknowledgment under Rule 90(2) issued after the 15-day prescribed limit.

• Both SCN & final rejection order issued well beyond the 60-day statutory timeframe u/s 54(7) CGST Act.

• Refund rejection based on absence of E-way bills and small business premises – issues not part of the original SCN.

  
  

⚖️ Court’s Observations:

• Time limits matter: 60-day refund processing limit is mandatory, not directory.

• Delay by authorities renders proceedings unsustainable in law.

• Once an application is acknowledged as complete, officers cannot add fresh deficiencies or extraneous grounds later.

🏛 Decision:

• Refund rejection order set aside.

• Authorities directed to process refund with applicable interest.

💡 Key Lessons for Businesses & Startups:

1. Timelines are statutory safeguards – they protect taxpayers from administrative delays.

2. Refund claims cannot be denied on irrelevant grounds beyond SCN.

3. Once acknowledged, completeness is final – no scope for afterthought deficiencies.

4. Businesses should always challenge arbitrary delays and rejections.

“Law delayed is business strained,

But fairness ensures losses are regained.

Timely justice is more than relief,

It restores compliance, trust, belief.”

📌 Disclaimer: The above article is intended for informational and educational purposes only. It should not be construed as legal or professional advice. For tailored guidance, consult your Chartered Accountant or legal advisor.

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