Challenge to 6 months limitation period for ST refund u/s 102(3) to be heard by SC

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M/s. MDP Infra (India) Pvt. Ltd. (“the Petitioner”) is engaged in the business of executing construction contracts for Government, Semi-Government, Governmental authorities, Local Authorities, Charitable Trusts, and other private projects. The Petitioner availed exemption on the construction contracts executed by it in terms Serial No. 12 of the Mega Exemption Notification.

The said exemption was withdrawn with effect from March 1, 2015 vide Notification No. 6/2015-ST and once again restored vide Finance Bill, 2016. As per Section 156 of the Finance Bill, 2016, a new Section 102 was inserted in the Finance Act, 1994 (“Finance Act”) which retrospectively provided that no service tax (“ST“) would be levied from April 1, 2015 to February 29, 2016 in respect of certain taxable services relating to construction of Government building.

As per Section 102, an application for the claim of refund of ST shall be made within a period of 6 months from the date on which the Finance Bill, 2016 receives the assent of the President i.e. 6 months from May 14, 2016 being November 13, 2016. However, since the affairs of the Petitioner about the availability of exemption on contracts executed by it for the Government/ Government entities was under investigation, the Petitioner could not have filed the refund claim within the stipulated time of 6 months i.e. by November 13, 2016 but filed same on March 23, 2017. The Petitioner filed the claim on November 13, 2016.

Issue Involved:

The Petitioner prayed the Supreme Court to issue notice and tag the present matter with the Special Leave Petition (“SLP”) similar in the case of M/s. Essar Bulk Terminal Salaya Ltd. and Anr. Vs. Union of India.

Petitioner’s Contention:

  • The Petitioner contended that Section 102(3) of the Finance Act is ultra vires to Article 265 of the Constitution of India read with Article 19(1)(g) is as much as it hedges conditions in the form of a period of limitation, on the repayment of amounts even when the levy and collection have been done away with.
  • It was further submitted that the refund claimed is not time barred by virtue of the provisions of Section 11B of the Excise Act which has been made applicable to ST by virtue of Section 83 of the Finance Act. The Petitioner submitted that the limitation period of one year from the relevant date as provided under Section 11B would be applicable to refund claim of the Petitioner and accordingly the application is not time barred.
  • Furthermore, it was submitted that the time limit/ condition of 6 months for making an application for refund is merely directory/procedural and the said Section ought to be construed liberally. The Petitioner submitted that Section 102(3) of Finance Act does not provide any consequence like a prohibition against grant of refund if the application for refund is not made within the stipulated period.


The Hon’ble Supreme Court under Civil Appeal Diary No(s). 17814/2019 dated August 2, 2019, noted the contentions of the Petitioner and condoned the delay. Accordingly, issued a notice to Revenue and Tag with SLP(C) No. 25251/2018.