Judicial Corner:Time limit of 60 days for processing refund application is mandatory and non-compliance vitiates order – Calcutta High Court(18.08.2025)

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Time limit of 60 days for processing refund application is mandatory and non-compliance vitiates order – Calcutta High Court {Suraj Mangar V/s Assistant Commissioner of WB State Tax (2025) 33 Centax 70 (Cal.)}

 

 

Facts:

  • Applicant filed refund claim for the period Feb 2021 to Aug 2021.
  • Refund was rejected by Proper Officer.
  • Applicant challenged rejection on the ground that the order was passed beyond the statutory 60-day time limit under Section 54(7) of the CGST Act.

 

Issue:

 

Whether the 60-day time limit for processing refund applications under Section 54(7) is mandatory or directory.

 

Held:

  • Section 54(7) mandates that the Proper Officer shall issue refund order within 60 days from receipt of a complete application.
  • The time limit of 60 days is mandatory, not directory.
  • Non-compliance vitiates the refund order.
  • Delay in acknowledgment under Rule 90(2) or SCN beyond 15 days further weakened the Department’s case.
  • The impugned refund rejection order was invalid as it was passed beyond 60 days.
  • Department directed to refund the amount with interest.