Order date:14 Aug 2025 
Parties: M/s Louis Dreyfus Company Pvt. Ltd. V. Union of India & Ors.

Facts -

• The petitioner, an importer, had paid GST under reverse charge on ocean freight for CIF contracts pursuant to Notifications 8/2017 and 10/2017. The Supreme Court in Mohit Minerals (2022) struck down the levy.
• The petitioner applied for refunds in March 2023, but the adjudicating authority rejected them as time-barred under Section 54 of the CGST Act, which decision was confirmed in appeal. The petitioner challenged these orders before the High Court.

Issue -

• Whether refund of GST paid under an invalid levy can be denied on the ground of limitation under Section 54 of the CGST Act?

Order -

• The division bench of the Hon’ble high court held that amounts collected under an unconstitutional or invalid levy are not “tax” within the meaning of Article 265, and therefore refund of such payments cannot be regulated strictly by Section 54 of the CGST Act.
• It emphasized that judicial declarations of invalidity operate retrospectively, unless expressly limited by the Court; hence Mohit Minerals applied even to pre-2022 payments.
• The Court relied on Bhailal Bhai (SC) and Gujarat HC decisions (Comsol, Binani Cement) to conclude that such refunds fall under mistake of law principles, where limitation under Section 54 is not applicable.
• Accordingly, the rejection orders were set aside, and the matter was remanded to the adjudicating authority to consider the refund claims on merits, without raising limitation objections, within four weeks.