Facts of the Case

HSV Media Private Limited filed a writ petition before the Delhi High Court challenging an order dated 06.04.2023 by which its application for refund of unutilised Input Tax Credit (ITC) amounting to Rs.59,84,695 was rejected by the Commissioner of Central Tax and GST.

The petitioner approached the High Court directly under Article 226 instead of first exhausting the statutory appellate remedy available against such refund-rejection orders.

The petition, along with an accompanying exemption application, was heard and disposed of on 01.05.2023 by a Division Bench of the Delhi High Court.

Issues Involved

  1. Whether the High Court should exercise its writ jurisdiction to examine the correctness of the ITC refund rejection when an undisputed statutory appellate remedy was available to the petitioner.

Petitioner's Arguments

  • The petitioner impugned the order dated 06.04.2023 rejecting its refund claim of unutilised Input Tax Credit of Rs.59,84,695, seeking the High Court's intervention under Article 226.

Respondent's Arguments

  • The Commissioner of Central Tax and GST submitted (through counsel) in effect that the petitioner had an efficacious statutory remedy of appeal against the impugned order and that the writ petition, filed without exhausting that remedy, was not maintainable in this form.

Court Order / Findings

  • The Court noted that it was undisputed that the petitioner had the statutory remedy of an appeal against the refund-rejection order.
  • In view of this, the Court held that it did not consider it 'apposite' to entertain the writ petition and dismissed it.
  • The Court clarified that the petitioner was not precluded from availing the statutory remedy, and that all rights and contentions of the parties on the merits of the refund claim were expressly kept open.

Important Clarification

This order does not decide whether the ITC refund was rightly or wrongly rejected – it is a threshold ruling on maintainability. Taxpayers should be aware that Delhi High Court (and most High Courts) will generally decline to entertain writ petitions against GST orders where an effective statutory appeal under Section 107 of the CGST Act is available, and the correct course is to file that appeal rather than approach the High Court directly.

Sections Involved

  • Central Goods and Services Tax Act, 2017 – Section 107 (statutory appeal against orders, including refund rejections) and Section 54 (refund of unutilised input tax credit)
  • Constitution of India, 1950 – Article 226 (discretionary writ jurisdiction and the rule of alternate remedy)

Decision – In Favour of

The writ petition was dismissed on the threshold ground of availability of an alternate statutory remedy, without any decision on the merits of the refund rejection; the petitioner was left free to pursue its appeal, with all contentions reserved.

Case Details

  • Court: High Court of Delhi at New Delhi
  • Case No.: W.P.(C) 5612/2023 & CM APPL. 22005/2023
  • Coram: Justice Vibhu Bakhru and Justice Amit Mahajan
  • Date: 01.05.2023

Link to Download the Order

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