GST was paid but later clarified as not payable by a beneficial circular. In Messrs Aculife Health Care (P.) Ltd. vs. Union of India (R/Special Civil Application No. 17800 of 2023), the Hon'ble Gujarat HC held that the limitation for filing a refund claim would be two years from the date of the circular. Against this, Explanation (h) to Section 54 of the CGST Act provides for a refund claim only within two years from the date of payment of tax. Interestingly, the aforesaid judgment referred to an earlier Division Bench judgment which specifies the limitation as three years from the knowledge of mistake.

The court also observed that, just as citizens have to diligently pay tax which are legally due to the State, equally, as a corollary, the State is not entitled to unjustly enrich itself with amounts collected from citizens which are not sanctioned as "tax" within the meaning of Article 265.