Facts of the Case

M/s ABB India Limited, registered under GSTIN 29AAACA3834B1Z4, filed a refund application for Rs. 81,71,112 under Section 54 of the CGST Act for excess payment of tax for the period February 2020, arising from credit notes issued following a corporate demerger arrangement with Hitachi Energy India Limited. The Assistant Commissioner rejected the refund vide Order/Endorsement dated 28.01.2022 in Form GST RFD-06, holding the credit notes were issued beyond the time limit prescribed under Section 34. The petitioner's statutory appeal under Section 107 was summarily dismissed by the Joint Commissioner (Appeals) on the erroneous ground that the appeal was filed against a mere 'endorsement' rather than an appealable order. Aggrieved, ABB India approached the High Court of Karnataka at Bengaluru, which decided the matter on 14.11.2025.

Issues Involved

  1. Whether the refund rejection communicated via Form GST RFD-06 and an accompanying endorsement constitutes an appealable 'decision or order' under Section 107 of the KGST/CGST Act.
  2. Whether the First Appellate Authority erred in summarily dismissing the appeal as not maintainable without examining the merits of the refund claim.
  3. Whether the matter should be remitted for a fresh, merits-based hearing of the refund appeal.

Petitioner's Arguments

  • The refund rejection order in Form GST RFD-06 dated 28.01.2022, read with the endorsement dated 14.02.2022, was a substantive, detailed order rejecting the refund claim on merits, and was clearly an appealable order under Section 107.
  • The First Appellate Authority erred in treating the appeal as filed only against a non-appealable 'endorsement,' when in fact a full refund rejection order existed on record along with the departmental portal's own record showing a 'Refund Sanction/Rejection Order.'
  • Reliance was placed on Nam Estates Pvt. Ltd. and other precedents to contend that the refund rejection deserved to be examined and allowed on merits.

Respondent's Arguments

  • Learned HCGP reiterated the contentions in the Statement of Objections, submitting that there was no merit in the petition and that the refund rejection, sustained by the Appellate Authority, was liable to be upheld.

Court Order / Findings

  • On perusing the detailed refund rejection order in Form GST RFD-06, the accompanying portal screenshot, and the endorsement, the Court found that respondent No.2 had in fact passed a detailed order rejecting the refund application on merits.
  • The Court held that the First Appellate Authority erred in summarily dismissing the appeal as not maintainable on the factually incorrect premise that no refund rejection order existed, without recording any finding on merits.
  • The impugned appellate order dated 21.10.2023 was set aside, and the appeal was held to be maintainable and appealable before the First Appellate Authority.
  • The matter was remitted to the First Appellate Authority for reconsideration afresh in accordance with law, with the petitioner directed to appear on 08.12.2025 without awaiting further notice.
  • The First Appellate Authority was directed to dispose of the appeal on merits within four months from that date.

Important Clarification

  • A refund rejection communicated through Form GST RFD-06 together with a reasoned endorsement is an appealable 'decision or order' under Section 107, and cannot be dismissed as merely a non-appealable endorsement.
  • An Appellate Authority must record findings on the substantive merits of a refund dispute rather than summarily rejecting an appeal on a technical, factually unsupported maintainability ground.
  • Where an appellate order suffers from such a fundamental factual error, the writ court will set it aside and restore the appeal for a genuine merits hearing rather than adjudicate the refund entitlement itself.

Sections Involved

  • Section 54, CGST Act, 2017 - governs refund of tax, including excess payment of tax and refund of unutilised input tax credit.
  • Section 34, CGST Act, 2017 - prescribes the time limit and procedure for issuance of credit notes, central to the department's original rejection.
  • Section 107, CGST/KGST Act, 2017 - governs appeals to the Appellate Authority against decisions or orders under the Act.

Decision - In Favour of

Decided in favour of the assessee on the maintainability question. The appellate dismissal was set aside and the refund appeal restored and remitted for a decision on merits, without the High Court itself ruling on refund entitlement.

Case Details

Court: High Court of Karnataka at Bengaluru
Case No.: Writ Petition No. 17442 of 2025 (T-RES)
Neutral Citation: 2025:KHC:47533
Coram: Hon'ble Mr. Justice S.R. Krishna Kumar
Date of Decision: 14.11.2025

Link to Download the Order

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