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Facts of the Case

Marathon Electric India Private Limited, engaged in providing information technology software services to a US-based group entity, M/s. Regal Beloit America Inc. (RBA), filed a GST refund claim of Rs. 54,31,283/- in Form GST-RFD-01 for the period April 2020 to March 2021, treating its supply to RBA as export of services. The refund was rejected by the sanctioning authority on 07.06.2022, and the appeal against that rejection was also rejected by order dated 24.04.2023, without any specific finding on the submissions made by the petitioner at the personal hearing or in its written reply.

Issues Involved

  1. Whether the impugned appellate order rejecting the refund claim, without recording specific findings on the petitioner's submissions, was a valid, speaking order.
  2. Whether the petitioner's supply to RBA qualified as export of services entitling it to the refund, and whether it was rendered as an independent contractor rather than as an "agent" of RBA.

Petitioner's Arguments

  • The petitioner argued that the impugned order failed to deal with or advert to the submissions made at the personal hearing and in the written reply dated 16.01.2023, amounting to a non-application of mind.
  • Reliance was placed on a consistent line of Bombay High Court decisions — including Sundyne Pumps and Compressors, Lubrizol Advance Materials, Vistex Asia Pacific, V Ships India, and Magna Automotive — where similarly non-speaking refund-rejection orders were remanded for de novo consideration.
  • It was submitted that the impugned order should be set aside and the refund claim adjudicated afresh after a proper hearing.

Respondent's Arguments

  • The Additional Government Pleader for the State opposed the reliefs sought, submitting that the impugned order was a well-reasoned and speaking order that ought to be upheld on its own terms.

Court Order / Findings

  • The Division Bench found substance in the petitioner's contentions, noting that no specific finding had been recorded in the impugned order before rejecting the refund application, and that a reasoned, speaking order was required before any such rejection.
  • The Court held the impugned order suffered from the vice of being a non-speaking order vis-à-vis the rejection of the refund claim, consistent with its own line of precedent on similarly deficient refund-rejection orders.
  • The impugned order dated 24.04.2023 was quashed and set aside, and the matter remanded to the Appellate Authority for de novo consideration of the refund claim, to be completed within three months, with all contentions of the parties expressly kept open.

Important Clarification

  • An appellate order rejecting a GST refund claim must specifically engage with and record findings on the submissions made by the claimant at the personal hearing and in its written reply; failure to do so renders the order non-speaking and liable to be set aside, regardless of the underlying merits of the export-of-services classification question.
  • Courts will remand such matters for de novo consideration rather than deciding the substantive refund eligibility themselves, preserving all contentions — including whether the supply qualifies as export of services — for fresh adjudication.

Sections Involved

  • Section 54, CGST Act, 2017 – governs refund of tax, including refund of unutilised ITC on export of services.
  • Section 56, CGST Act, 2017 – provides for interest on delayed refunds.
  • Form GST-RFD-01, RFD-06, RFD-08 and RFD-09 – the prescribed refund application and adjudication forms.

Decision – In Favour of

The decision is in favour of the assessee. The non-speaking refund-rejection order was quashed and the matter remanded for de novo consideration within three months, with all contentions, including export-of-services classification, kept open.

Case Details

Court: High Court of Judicature at Bombay
Case No.: Writ Petition No. 15242/2025
CNR / Citation: Not available in judgment text
Coram: Hon'ble Mr. Justice G.S. Kulkarni and Hon'ble Ms. Justice Aarti Sathe
Date of Order: 16 April 2026

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