Limitation Period for Refunding Erroneously Paid Kerala Flood Cess Runs from Date of Correct Remittance

By | October 3, 2026
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Limitation Period for Refunding Erroneously Paid Kerala Flood Cess Runs from Date of Correct Remittance

Limitation Period for Refunding Erroneously Paid Kerala Flood Cess Runs from Date of Correct Remittance

Issue

Whether the two-year limitation period for claiming a refund of Kerala Flood Cess wrongly paid via Form GSTR-3B should be calculated from the date of the initial mistaken payment or from the date of the correct remittance made in the Form KFC-A account.

Facts

  • The petitioner, registered under the CGST/KGST Act, paid Kerala Flood Cess along with Form GSTR-3B for the tax period August 2019 to May 2020 due to confusion regarding the correct payment mechanism.
  • Under the applicable tax framework, Kerala Flood Cess was required to be remitted separately through Form KFC-A rather than via Form GSTR-3B.
  • Upon realizing the mistake, the petitioner subsequently remitted the requisite cess into the correct KFC-A account.
  • On July 30, 2025, the petitioner filed an application for refund of the amount wrongly deposited earlier through Form GSTR-3B.
  • The competent authority rejected the refund claim as time-barred, reckoning the two-year limitation period from the date of the initial, mistaken GSTR-3B payment.
  • Aggrieved by the rejection, the petitioner filed a writ petition challenging the rejection order.

Decision

  • Held in favor of the assessee; the issue is squarely covered by the precedent in Pushpagiri Medical Society v. State of Kerala [2026]  (Kerala).
  • Held, the relevant date for computing the two-year limitation period under Section 54 for refunding Kerala Flood Cess wrongly paid with Form GSTR-3B is the date of the actual correct remittance in the KFC-A account, not the date of the mistaken payment.
  • Held, since the correct remittance occurred shortly before July 2025 and the refund application was submitted on July 30, 2025, the claim fell well within the statutory period of limitation.
  • Held, the impugned order rejecting the refund claim was quashed, and the department was directed to treat the refund application as filed within time.

Key Takeaways

  • Relevant Date Trigger: Where a tax or cess is mistakenly deposited into an incorrect account or return format, the limitation period for seeking a refund of the erroneously paid amount runs from the date of the rectifying payment made in the correct account.
  • No Fortuitous Enrichment for Revenue: Retention of a double payment resulting from a bona fide mistake in choosing the wrong payment channel/form violates statutory refund principles.
  • Substance Over Form in Tax Remittances: Tax payments misallocated due to technical procedural confusion do not trigger limitation expiry prior to the taxpayer’s act of rectifying the payment through the designated statutory channel.
HIGH COURT OF KERALA
Narayanan Manikandan Traders (P.) Ltd.
v.
Assistant Commissioner
ZIYAD RAHMAN A.A., J.
WP (C) NO. 6141 OF 2026
SEPTEMBER  1, 2026
Aravind Sreekumar, Aravind Rajagopalan Menon, Alex T. Thevarcad, Smt. Binisha Baby, Smt. Saritha K.S., Advs. and Anil D. Nair, Sr. Adv. for the Petitioner. P.R.Sreejith, SC, Smt.Lakshmi Meenakshi P.R., Smt. Anju Divakar, CGCs, O.M. Shalina, Deputy Solicitor General and Lalu Mathews M.V., G.P. for the Respondent.
JUDGMENT
1. This writ petition is submitted by the petitioner, a registered taxpayer under the provisions of the CGST/KGST Act, 2017 being aggrieved by the rejection of refund application submitted by the petitioner. Ext.P3 is the application dated 30.07.2025 submitted by the petitioner seeking refund under Section 54 GST Act. Ext.P4 is the order passed by the authority concerned.
2. The facts that led to the filing of this writ petition are as follows: The State Government introduced Kerala Flood Cess as per the Finance Act, 2019, which was notified with effect from June, 2019. The said cess was introduced to overcome the crisis caused in the flood that occurred in State of Kerala in the year 2018. After introduction of the same, there was some confusion with respect to the mode through which the said payment has to be made towards Kerala Flood Cess.
3. Consequently, the petitioner paid the amount towards Kerala Flood Cess for the period from August, 2019 to May 2020 along with the return in Form GSTR 3B, whereas, the requirement was to the effect the payment of the same through Form KFC-A. Upon the realizing the mistake, the petitioner remitted the amount on as evidenced by Ext P2. Thereafter, the petitioner submitted Ext.P3 application seeking refund of the amount, which was rejected as per Ext.P4 order. The reason stated in Ext.P4 was that, the application was submitted beyond the statutory period of two years from the relevant date as contemplated under Section 54 of the CGST Act. This writ petition is submitted by the petitioner in such circumstances.
4. I have heard the learned Counsel for the petitioner, the learned Standing Counsel for the 1st respondent, the learned Government Pleader for the 2nd respondent and the learned CGC for the 3rd respondent.
5. As far as the issue involved in this writ petition is concerned, this Court has already decided the same, in Pushpagiri Medical Society v. State of Kerala  (Kerala)/W.P(C) No.40664/2025, where, this Court came to a definite conclusion that, in respect of the application to be submitted seeking refund of the amount mistakenly paid along with Form GSTR 3B towards Kerala Flood Cess, the relevant date could be the date on which the petitioner had paid the amounts towards the Kerala Flood Cess in the correct account. Thus, it was clearly held by this Court in the aforesaid judgment that, the period of two years as envisaged in Section 54 has to be reckoned from the date on which the petitioner had remitted the Kerala Flood Cess and not from the payment effected along with Form GSTR 3B. In this case, it is evident from Ext.P2 that the petitioner had remitted the amount towards Kerala Flood Cess before 2.07.2025 and in the light of the principles laid down in Pushpagiri Medical Society’s case the period of two years starts from the date of payment. It is evident from Ext.P3 that the petitioner had submitted the application on 30.07.2025 and therefore, the same is within the period specified under Section 54 of the CGST Act. Therefore, I am of the view that, the petitioner is entitled to succeed.
6. Accordingly, this writ petition is disposed of quashing Ext.P4 with a direction to the competent authority to reconsider Ext.P3 application by treating it as an application submitted in time. Appropriate orders thereon shall be passed, within a period of one month from the date of receipt of a copy of the judgment and the refund shall be affected immediately upon sanctioning the same.