Supreme Court’s COVID-19 Extension Overrides GST Refund Deadlines: Allahabad High Court Ruling

This ruling (delivered in February 2026) serves as a critical reminder that the Supreme Court’s Suo Motu directions regarding the COVID-19 pandemic provide a mandatory “blanket exclusion” for limitation periods, which tax authorities cannot ignore when processing refund applications.

The Legal Conflict: Section 54(1) vs. SC Suo Motu Directions

The Statutory Rule:

Under Section 54(1) of the CGST Act, a refund application must be filed within two years from the “relevant date.” For the financial years 2018-19 and 2019-20, these deadlines would normally have lapsed in 2021 and 2022, respectively.

The Judicial Exception:

Due to the pandemic, the Supreme Court in Cognizance for Extension of Limitation, In re [2022] issued a binding directive under Article 141 of the Constitution. It ordered that the period from 15.03.2020 to 28.02.2022 must be excluded when computing the limitation period for any judicial or quasi-judicial proceeding under general or special laws.

Facts of the Case

The Refund Claims: The petitioner filed GST refund applications for the periods 2018-19 and 2019-20.
The Rejection: The Adjudicating Authority summarily rejected the applications, treating them as time-barred. The authority calculated the two-year window mathematically without accounting for the COVID-19 “pause” button pressed by the Supreme Court.
The Challenge: The petitioner moved the High Court, arguing that the rejection was a blatant violation of the Supreme Court’s mandatory directions which apply to all “quasi-judicial” authorities, including GST Officers.

The Decision: Quashing of Rejection and Remand

The High Court ruled in favour of the assessee/matter remanded, based on the following legal pillars:

Mandatory Exclusion: The period from March 15, 2020, to February 28, 2022, is a “dead period” for the purposes of limitation. It must be physically subtracted from the timeline calculation.
Quasi-Judicial Nature: Since the processing of a refund application under Section 54 involves the adjudication of rights, it is a quasi-judicial proceeding. Therefore, the GST officer was bound to follow the Supreme Court’s extension.
Vitiated Computation: By failing to exclude the nearly two-year pandemic period, the Adjudicating Authority’s math was fundamentally flawed. The rejection orders were held to be legally unsustainable.
Fresh Adjudication: The High Court quashed the rejection orders and directed the department to decide the refund applications afresh on merits, treating them as being filed within the valid limitation period.

Key Takeaways for Taxpayers

Retroactive Relief: If your refund for 2017-18, 2018-19, or 2019-20 was rejected solely on the ground of “delay” during the pandemic years, you have a strong legal basis to challenge that rejection in a Writ Petition.
Notification 13/2022-CT: Additionally, the Government issued Notification No. 13/2022-Central Tax, which specifically excluded the period from 01.03.2020 to 28.02.2022 for the purpose of filing refund claims under Section 54. This administrative notification works in tandem with the Supreme Court’s judicial order.
Quasi-Judicial Proceedings: This precedent confirms that “limitation” isn’t just for filing appeals; it applies to the initial filing of refund applications before the “Proper Officer” as well.

Summary of the Limitation Calculation

Standard Period: 24 Months from Relevant Date.
COVID Extension: Add approx. 715 days (the excluded period) to your original deadline.
Final Result: Many applications that appeared late in 2022 or 2023 are, in fact, legally timely.

HIGH COURT OF ALLAHABAD

Arvind Kumar Agarwal

State of Uttar Pradesh^*

Shekhar B. Saraf and Vivek Saran, JJ.

WRIT TAX No. 4179 of 2025

FEBRUARY 25, 2026

Pallavi Mishra, Prateek Bansal and Saurabh Paul for the Petitioner.

ORDER

1. Heard Sri Saurabh Paul Mishra, learned counsel for the petitioner and learned Standing Counsel for the State-respondents.

2. This writ petition has been filed praying for the following reliefs:-

“a. Issue a writ, order or direction in the nature of Certiorari to quash the Impugned Deficiency Memos dated 18.01.2022 bearing no. ZD090122022770U and ZD0901220227761 issued by Respondent No. 3 to the Petitioners in Form GST-RFD-03 under Rule 90(3) of the CGST/UPGST Rules (Annexure-P1);

b. Issue a writ, order or direction in the nature of Mandamus directing the Respondent No. 3 to reconsider the two refund applications dated 15.01.2022 filed in Form GST-RFD-01 (Annexure-P10) by the Petitioners and condone the delay in their submission as per the mandate of Hon’ble Supreme Court in In Re: Cognizance for Extension of Limitation, Suo Motu Writ Petition (C) No. 03 of 2020, and pass a fresh and reasoned order after according an opportunity of hearing to the Petitioners;”

3. Petitioner filed refund applications for tax period from Financial Year 2018-2019 and 2019-2020, which have been rejected by the impugned order, passed by the respondent no.3.

4. As per impugned order, the period of limitation for filing refund application in terms of Section 54(1) of the CGST/UPGST Act, had expired and thereafter, petitioner filed refund application on 18.01.2022, which has been rejected by the impugned order on the ground of delay.

5. Learned counsel for the petitioner submitted that the period between 15.03.2020 to 28.02.2022 has been directed by the Supreme Court to be excluded for the purposes of limitation as may be prescribed under any general or special laws in respect of all judicial or quasi-judicial proceedings, vide impugned order dated 10.01.2022 in Misc. Application No. 21 of 2022, Suo-Moto Writ Petition (C) No.3 of 2020 Cognizance for Extension of Limitation, In re (SC). He, therefore, submits that refund application has been arbitrarily rejected by the respondent no.4.

6. Learned Standing Counsel could not dispute the exclusion period from 15.03.2020 to 28.02.2022 as provided by the Hon’ble Supreme Court for the purposes of limitation.

7. We have carefully considered the submissions of the learned counsel for the parties.

8. Hon’ble Supreme Court vide its order dated 10.01.2022 directed as under:-

“Taking into consideration the arguments advanced by learned counsel and the impact of the surge of the virus on public health and adversities faced by litigants in the prevailing conditions, we deem it appropriate to disposed of the M.A. No. 21 of 2022 with the following directions:

I. The order dated 23.03.2020 is restored and in continuation of the subsequent orders dated 08.03.2021, 27.04.2021 and 23.09.2021, it is directed that the period from 15.03.2020 till 28.02.2022 shall stand excluded for the purposes of limitation as may be prescribed under any general or special laws in respect of all judicial or quasi-judicial proceedings.

II. Consequently, the balance period of limitation remaining as on 03.10.2021, if any, shall become available with effect from 01.03.2022.

III. In cases where the limitation would have expired during the period between 15.03.2020 till 28.02.2022, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 01.03.2022. In the event the actual balance period of limitation remaining, with effect from 01.03.2022 is greater than 90 days, that longer period shall apply.

IV. It is further clarified that the period from 15.03.2020 till 28.02.2022 shall also stand excluded in computing the periods prescribed under sections 23(4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act 1881 and any other laws, which prescribe period (s) of limitation for instituting proceeding, outer limits (within which the court or tribunal can condone delay) and termination of proceedings”

9. The aforequoted order has been passed by Hon’ble Supreme Court due to the prevailing situation on account of the Covid pandemic.

10. On the fact of the present case, we find that the refund application of the petitioner could not have been rejected by the respondent no. 3 merely on the ground of delay, ignoring the aforequoted order of Hon’ble Supreme Court.

11. Under the circumstances, the impugned order cannot be sustained and is hereby quashed. Matter is remitted back to the respondent no. 3 to decide the refund application of the petitioner in accordance with law, by reasoned and speaking order, expeditiously and preferably within six weeks from the date of presentation of copy of the order, after affording reasonable opportunity of hearing to the petitioner.

12. Subject to the observations made above, the writ petition is disposed of.