The Goods and Services Tax Appellate Tribunal (GSTAT), Patna Bench, has admitted an appeal raising an important question on the scope of the two-year limitation period prescribed under Section 54(1) of the Central Goods and Services Tax Act, 2017 (CGST Act), particularly where a refund is claimed in respect of an amount allegedly paid by mistake.

The bench of Manoj Shankar (Judicial  Member) and Sanjay Kumar Mawandia (Technical Member)  directed the respondent side to file cross-objections, if any, within six weeks. The matter has subsequently been listed for further hearing on October 5, 2026.

Buy Now: 130 GST Judgments – E-Magazine July 2026

The central controversy before the Tribunal is whether the statutory limitation period under Section 54(1) applies uniformly to every category of refund claim, including an amount which the taxpayer contends was paid by mistake, or whether the two-year restriction is confined to cases involving tax that was lawfully collected.

The appellant specifically framed the legal issue as whether the two-year limitation prescribed under Section 54(1) of the CGST Act applies to all refund claims, including sums paid by mistake, or whether the limitation is restricted to refunds relating to tax that was legally collected.

This issue has significant implications because the characterization of an amount paid to the Government—whether as legitimately collected tax or as an amount paid inadvertently or mistakenly—can potentially affect the manner in which the taxpayer’s refund entitlement and limitation period are examined.

According to the submissions recorded in the Tribunal’s order, the underlying dispute relates to works contract services supplied by Surya Nestbuild Limited to government entities. The appellant contended that the first appellate authority had wrongly denied the refund claim solely on the basis that the application had been made after expiry of the prescribed two-year period from the relevant dates.

Rather than deciding the substantive refund entitlement at the admission stage, the GSTAT Division Bench considered whether the appeal raised a legal issue warranting examination on merits.

The Tribunal accordingly admitted the appeal for hearing on merits. The order expressly records that, on perusal of the case record and consideration of the submissions, the Bench found that the appeal involved a legal point requiring adjudication.

The admission of the appeal is therefore significant because the Tribunal has recognised that the dispute cannot be disposed of merely by applying the limitation objection without examining the underlying legal question raised by the appellant.

The issue admitted for consideration can broadly be stated as:

Does the two-year limitation prescribed under Section 54(1) of the CGST Act apply to every refund claim, including amounts paid by mistake, or is its operation confined to refunds of tax that was lawfully collected?

The Tribunal’s order does not decide this question at this stage. It only records that the issue constitutes a question of law and warrants consideration in the substantive appeal.

Consequently, the order should not be read as a ruling that the two-year limitation does not apply to mistaken payments. The precise legal position remains open for determination when the appeal is heard on merits.

The GSTAT Patna Bench has consequently admitted the appeal for hearing on merits, finding that the case involves a question of law concerning the applicability of the Section 54(1) limitation period to refund claims involving alleged payments made by mistake. The respondents have been granted six weeks to file cross-objections, with the matter fixed for further hearing on October 5, 2026.

The substantive question—whether the two-year limitation under Section 54(1) applies to such mistaken payments—remains open for adjudication.

Membership Required to Access Case Details & Order Copy

To view the complete Case Details and Download Order Copy, you must have an active membership. Please subscribe to continue.

Read More: Excess ITC Already Reversed Can’t Be Demanded Again: GSTAT