Facts of the Case

The petitioner, Marathon Electric India Private Limited, an IT software services provider, had entered into a Service Agreement with M/s Regal Beloit America Inc. (RBA), a USA-based group company, to supply customised IT services on a cost-plus-20%-markup basis. Treating the supply as an export of services under the IGST Act, 2017, the petitioner filed a refund claim of Rs.54,31,283/- (comprising IGST, CGST and SGST) in Form GST RFD-01 for the period April 2020 to March 2021. Following a show-cause notice in Form GST RFD-08 and the petitioner's reply, the refund was rejected by order dated 07.06.2022 (Form GST RFD-06). The petitioner's appeal against this rejection, despite a further reply and personal hearing, was dismissed by the appellate order dated 24 April 2023, upholding the original rejection.

Issues Involved

  1. Whether the impugned appellate order rejecting the export-of-services refund claim was a reasoned, speaking order that had considered the petitioner's submissions.
  2. Whether the matter warranted remand for a fresh, reasoned adjudication rather than the writ court deciding the underlying export-of-services controversy itself.

Petitioner's Arguments

  • The petitioner argued that the impugned order was passed without dealing with the submissions made at the personal hearing or in its written reply dated 16 January 2023, amounting to non-application of mind.
  • It relied 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 orders on export-of-service refund claims were remanded for de novo consideration.

Respondent's Arguments

  • The State's Additional Government Pleader opposed the petition, submitting that the impugned order was a well-reasoned, speaking order that ought to be upheld.

Court Order / Findings

  • The Division Bench found, consistent with its own repeated prior rulings on similar facts, that no specific finding had been recorded in the impugned order addressing the rejection of the refund application.
  • The Court held that the impugned order suffered from the vice of being a non-speaking order and was accordingly liable to be quashed, with the matter remanded for de novo consideration.
  • The appellate authority was directed to decide the refund claim afresh, after hearing the parties, within three months, with all contentions of both sides kept expressly open.

Important Clarification

  • An appellate order rejecting a GST refund claim (including export-of-services refunds) must engage with and record findings on the specific submissions and documents placed by the assessee at the personal hearing; a cryptic or non-speaking order that ignores the assessee's reply is liable to be quashed as a matter of course, without the writ court itself adjudicating the underlying tax controversy.
  • Courts have consistently applied this standard across a series of export-of-service refund matters, making non-speaking rejection orders a recurring, remediable defect rather than a one-off irregularity.

Sections Involved

  • Section 16 of the IGST Act, 2017 - defines zero-rated supply, including export of services, and the associated refund entitlement.
  • Section 54 of the CGST Act, 2017 - governs the procedure for claiming refund of tax, including of accumulated input tax credit on export of services.
  • Section 56 of the CGST Act, 2017 - provides for interest on delayed refunds.

Decision – In Favour of

The petition was allowed in favour of the Assessee to the extent that the non-speaking rejection orders were quashed and the refund claim remanded for a fresh, reasoned decision; the Court did not itself rule on the substantive entitlement to the export-of-services refund.

Case Details

High Court of Judicature at Bombay, Writ Petition No. 15242 of 2025; Coram: Hon'ble Mr. Justice G. S. Kulkarni and Hon'ble Ms. Justice Aarti Sathe; decided on 16 April 2026.

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