TaxTMI 
TaxTMI 
TaxTMI 
In M/s. JVG Technology Private Limited Versus Commissioner CGST, Delhi West And Anr. - 2025 (5) TMI 1983 - DELHI HIGH COURT, the petitioner is engaged in the business of export of mobile phones. The petitioner procures input services from various dealers in respect of domestic sales and discharges GST @ 18%. The petitioner has excess balance of input tax credit. The petitioner filed a refund claim in Form GST RFD – 01 for seeking refund of Rs.2.03 crores for the month of September 2022. The said refund application was filed on 29.10.2022. The petitioner filed yet another refund application on 26.11.2022 for the month of October 2022 to the tune of Rs.2.98 crores.
The Department issued two show cause notices on 29.05.2023. The petitioner filed replies to the said show cause notices online. The said refund claims were rejected by the Department on 26.06.2023 by the Assistant Commissioner, Rohini, Delhi. The petitioner, being aggrieved against the said rejection orders, field an appeal before the Commissioner (Appeals). The Appellate Authority allowed the refund claim.
Based on the order of the Appellate Authority the petitioner filed refund claim to the Department. The Departmental officers passed an internal order holding that the order of the First Appellate Authority would adversely affect the interest of the Department.
Since the refund has not been to the petitioner by the Department, the petitioner filed the present writ petition before the High Court. The High Court relied on its own judgment in Shalender Kumar Versus Commissioner Delhi West CGST Commissionerate & Ors. - 2025 (4) TMI 555 - DELHI HIGH COURT. In the said case, the High Court analysed the provisions of Section 54 of the Central Goods and Service Tax Act, 2017 (‘Act’ for short). Section 54(11) of the Act provides that where an order giving rise to a refund is the subject matter of an appeal or further proceedings or where any of the proceedings under the Act is pending and the Commissioner is of the opinion that grant of such refund is likely to adversely affect the revenue in the said appeal or other proceedings on account of malfeasance or fraud committed, the Commissioner may, after giving the taxable person an opportunity of being heard, withhold the refund till such time as he may determine.
In the said case the High Court was of the opinion that the Department’s opinion under Section 54(11) of the Act cannot be relied upon a standalone basis. In the absence of appeal or any other proceeding pending, challenging the order of the Appellate Authority, the opinion of the Department under Section 54(11) of the Act cannot result in holding back the refund. The High Court further observed that the Appellate Authority directed the Department to refund the amount to the petitioner. No review application has been filed by the Department against the said order.
The High Court also relied on the judgment of its own in ‘Mr. Brij Mohan Mangla Versus Union Of India & Ors. - 2023 (3) TMI 327 - DELHI HIGH COURT. This judgment has been followed by the High Courts subsequently in many cases. In the said order the High Court held that the order-in-appeal which is in favour of the taxable person cannot be ignored solely because the Revenue is going to file appeal against the said order is erroneous and is required to be set aside. The High Court further held that the Department would not preclude from availing the remedy against the order-in-appeal passed by the Appellate Authority. If the Department wins the case against the First Appellate Authority’s order the Department would be entitled to take consequential action for recovery of any amount that has been disbursed. The High Court further directed the department to process the refund along with interest in terms of Section 56 of the Act.
In view of the above case laws, the High Court held that the opinion of the Department cannot be relied upon on a standalone basis, without any challenge to the order of the First Appellate Authority. The High Court directed the Department to refund the amount along with interest within two months from the date of the order. The High Court further advised the petitioner, if the refund is not made within the time stipulated by the High Court the petitioner may file an application before the High Court in this regard.