Limitation Period for Cess Refund Runs from Correct Remittance Date in KFC-A, Making Refund Valid

By | September 19, 2026
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Limitation Period for Cess Refund Runs from Correct Remittance Date in KFC-A, Making Refund Valid
Issue
Whether the two-year limitation period for claiming a refund of Kerala Flood Cess wrongly paid via Form GSTR-3B commences from the initial wrong payment date or from the date of correct remittance through Form KFC-A.
Facts
  • The petitioner, registered under the CGST/KGST Acts, paid Kerala Flood Cess along with Form GSTR-3B instead of the designated Form KFC-A for the period August 2019 to May 2020.
  • Upon initiation of proceedings by tax authorities for non-payment of cess, the petitioner remitted the cess through Form KFC-A on 27.06.2025.
  • The petitioner subsequently filed an application for refund of the excess/wrongly paid amount on 30.07.2025.
  • The tax authority rejected the refund claim as time-barred under Section 54, calculating the two-year limitation period from the date of the initial GSTR-3B payment.
  • The petitioner challenged the rejection order before the High Court.
Decision
  • The High Court held that the relevant date for computing the limitation period for refund of cess wrongly paid via Form GSTR-3B must be reckoned from the date of correct remittance through Form KFC-A.
  • Since the remittance via Form KFC-A was executed on 27.06.2025, the two-year statutory period under Section 54 commenced from that date.
  • The refund application filed on 30.07.2025 was well within the limitation period.
  • The impugned rejection order was quashed, and the authority was directed to treat the refund application as filed within time.
Key Takeaways
  • Relevant Date for Refund of Wrong Payments: When taxes or cesses are wrongly deposited under an incorrect return head, the limitation clock for claiming a refund resets upon the proper/rectified remittance under the correct statutory form.
  • Correction of Procedural Errors: Subsequent compliance under the correct prescribed form validates the timeline for seeking a refund of double/erroneous tax deposits under Section 54.
  • Relief Against Double Taxation: Tax authorities cannot invoke limitation based on an earlier mistaken filing when the statutory obligation was formally discharged on a subsequent date.
HIGH COURT OF KERALA
Narayanan Manikantan & Co.
v.
State Tax Officer
ZIYAD RAHMAN A.A., J.
WP(C) NO. 5521 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. Anju Divakar, CGC 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.P4 is the application dated 30.07.2025 submitted by the petitioner seeking refund under Section 54 GST Act. Ext.P5 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 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. Therefore, the petitioner was proceeded against for non-payment of the Kerala Flood Cess and upon the realizing the same, the petitioner remitted the amount on 27.06.2025 as evidenced by Ext.P3. Thereafter, the petitioner submitted Ext.P4 application seeking refund of the amount, which was rejected as per Ext.P5 order. The reason stated in Ext.P5 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 Government Pleader for the 1st respondent, the learned Standing Counsel 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 W.P(C) No.40664/2025 Pushpagiri Medical Society v. State of Kerala (Kerala), 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.
6. In this case, it is evident from Ext.P6 that, the petitioner had remitted the amount towards Kerala Flood Cess on 27.06.2026 and in the light of the principles laid down in Pushpagiri Medical Society’s case (supra) the period of two years starts from 27.06.2025 onwards. It is evident from Ext.P4 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.
7. Accordingly, this writ petition is disposed of quashing Ext.P5, with a direction to the competent authority to reconsider Ext.P4 application, by treating it as an application submitted in time. Appropriate orders thereon shall be passed in the light of the observations made in this judgment, within a period of one month from the date of receipt of a copy of this judgment and the refund shall be affected immediately upon sanctioning the same.