Facts of the Case

The petitioner, M/S Virtusa Consulting Services Private Limited (GSTIN 29AACCV6797L2ZB), challenged an Order-in-Appeal dated 22.02.2023 passed under Section 107(11) of the KGST/CGST Act, 2017, which had dismissed the petitioner's appeal against a rejection order dated 28.06.2022 (Form GST RFD-06) refusing its refund claim of Rs. 30,01,314/- towards IGST, following a show cause notice dated 16.05.2022 in Form GST RFD-08. The petitioner sought quashing of the SCN, the rejection order, and the appellate order, along with a direction to disburse the IGST refund with applicable interest.

Issues Involved

  1. Whether the appellate order dismissing the petitioner's refund appeal was a valid, reasoned order, or a non-speaking order passed without application of mind.
  2. Whether the matter should be remitted for fresh consideration of the refund claim, and if so, from what stage.

Petitioner's Arguments

  • The various contentions urged by the petitioner had not been considered by the appellate authority, which proceeded to dismiss the appeal by passing a laconic, cryptic, unreasoned, non-speaking order with absolutely no application of mind.

Respondent's Arguments

  • Learned CGC for respondent No.1 and learned HCGP for respondents No.2 to 4 defended the impugned orders, though the specific reasoning of the appellate order, on record, merely endorsed the original authority's restriction of turnover based on GST-portal figures without independently engaging with the grounds of appeal.

Court Order / Findings

  • On perusing the appellate order, the Court found it recorded only that the authorised representative reiterated the grounds of appeal, and that the reasons given by the original authority for rejecting the refund were 'valid' and 'legally correct' — without any independent discussion or reasoning by the appellate authority itself.
  • The Court held the order to be clearly laconic, cryptic, unreasoned, and a non-speaking order with absolutely no application of mind, warranting quashing.
  • The Order-in-Appeal dated 22.02.2023 was set aside, and the matter was remitted back to the stage of the petitioner submitting its reply to the show cause notice dated 16.05.2022, with liberty to the petitioner to file its reply, pleadings, and documents before the original authority, who was directed to consider the same and pass appropriate orders within three months.
  • All rival contentions were kept open, with no opinion expressed on the merits of the refund claim itself.

Important Clarification

  • An appellate order under Section 107(11) that merely records that grounds of appeal were reiterated and endorses the original authority's reasoning as 'valid' and 'legally correct', without independently engaging with the appellant's specific contentions, is liable to be quashed as a non-speaking order.
  • Where such an order is quashed, courts may remit the matter not merely to the appellate stage but all the way back to the SCN-reply stage, giving the assessee a fresh opportunity to place its full case before the original authority.

Sections Involved

  • Section 54, CGST Act, 2017 — refund of tax, including IGST refund on zero-rated supplies.
  • Section 107(11), CGST Act, 2017 — appellate authority's duty to pass a reasoned order confirming, modifying, or annulling the decision appealed against.

Decision – In Favour of

Disposed of with directions, in favour of the Assessee — the unreasoned appellate order was quashed and the matter remitted to the SCN-reply stage for fresh adjudication.

Case Details

Court: High Court of Karnataka at Bengaluru
Case No.: Writ Petition No. 25763 of 2023 (T-RES)
Neutral Citation: NC: 2025:KHC:43143
Coram: Hon'ble Mr. Justice S.R. Krishna Kumar
Date of Order: 28.10.2025

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