The petitioner sought refund of the pre-deposit made for filing appeal under Section 107 of the CGST/JGST Act. The refund application was rejected automatically on the ground of limitation under Section 54. The petitioner contended that once the appeal was allowed, retention of pre-deposit was without authority of law and hit by Article 265 of the Constitution.
The Court held that the issue was no longer res integra and stood covered by an earlier Division Bench decision holding that Section 54 limitation is not mandatory for refund of pre-deposit. Automatic rejection of refund on limitation was held to be unsustainable. The deficiency memos and rejection of refund were set aside with directions to process the refund along with statutory interest.