Facts of the Case

The petitioner, M/s. ADP Private Limited, filed two connected writ petitions assailing a common Order-in-Appeal dated 29.09.2023 passed by the Additional Commissioner (Appeals-I), Hyderabad, which set aside refund sanction orders dated 02.09.2022 and 07.10.2022 for the periods July-September 2020 and October-December 2020 respectively. The appellate authority had held that the Refund Sanctioning Authority erred in classifying the petitioner's services as export of service without examining the nature of the service, the place of provision under Section 13(3) to (13) of the Integrated Goods & Services Tax Act, 2017, and whether the supply genuinely qualified as export so as to permit refund.

Issues Involved

  1. Whether the appellate authority's order-in-appeal, disallowing export-of-service classification and consequential refund, should be examined on merits in writ jurisdiction.
  2. Whether the impugned order-in-appeal for the earlier periods should govern the Refund Sanctioning Authority's treatment of the petitioner's refund claims for subsequent periods (April to June 2022) pending constitution of the GST Appellate Tribunal.

Petitioner's Arguments

  • Persuaded by the order-in-appeal for the July 2020–December 2020 periods, the Refund Sanctioning Authority had been mechanically rejecting the petitioner's refund claims for subsequent periods (April to June 2022) as well, without independent verification, as evidenced by an order dated 18.06.2024.
  • The petitioner was ready to approach the GST Appellate Tribunal (to be constituted from 01.10.2025) on all grounds of law and fact once available, but sought an interim observation that claims for subsequent periods should not be rejected solely on the basis of the impugned order-in-appeal.

Respondent's Arguments

  • The Department submitted that refund claims for any subsequent period have to be processed and adjudicated on independent verification of supporting documents and agreements, so the petitioner's apprehension was misplaced.
  • The impugned order-in-appeal was not vulnerable, since the petitioner had failed to justify that its claim was based on turnover of zero-rated supply as stipulated under Rule 89(4)(D) of the CGST Rules, and the Refund Sanctioning Authority had failed to determine the adjusted total turnover under Rule 89(4)(E) for want of proper verification of agreements.
  • The Department did not object to the petitioner availing the appellate remedy before the GST Tribunal under Section 112 of the CGST Act.

Court Order / Findings

  • Both writ petitions were disposed of with liberty to the petitioner to approach the GST Tribunal within thirty days of its constitution, the Court expressly clarifying that it had not entered into the merits of the case of either party.
  • However, the Court deemed it proper to observe that while deciding the petitioner's claims relating to the subsequent period, the Refund Sanctioning Authority should not be influenced by the impugned order-in-appeal passed for the previous period, ensuring an independent assessment on the facts and documents of each period.
  • No costs were awarded.

Important Clarification

  • An adverse order-in-appeal on an export-of-service refund claim for one tax period cannot be mechanically extended by the Refund Sanctioning Authority to reject refund claims for subsequent, distinct tax periods; each period's claim must be independently verified on its own supporting documents and agreements under Rule 89(4) of the CGST Rules.
  • Where the GST Appellate Tribunal is yet to be constituted, courts will dispose of pending refund-appeal writs with liberty to approach the Tribunal once constituted, while issuing protective observations to prevent the intervening delay from prejudicing the assessee's subsequent-period claims.

Sections Involved

  • Section 2(6) of the Integrated Goods and Services Tax Act, 2017 — defines "export of services", the classification in dispute.
  • Sub-sections (3) to (13) of Section 13 of the IGST Act, 2017 — place-of-provision rules relevant to determining export status.
  • Rule 89(4) of the CGST Rules, 2017 — formula for refund of ITC on account of zero-rated supply without payment of tax, including turnover of zero-rated supply (D) and adjusted total turnover (E).
  • Section 112 of the CGST Act, 2017 — appeal to the Appellate Tribunal.

Decision – In Favour of

Disposed of with liberty to the Assessee to approach the GST Appellate Tribunal, and with a protective direction that subsequent-period refund claims be examined independently of the impugned order-in-appeal.

Case Details

Court: High Court for the State of Telangana at Hyderabad
Case No.: Writ Petition Nos.26406 and 26419 of 2024
Coram: The Hon'ble the Chief Justice Sri Aparesh Kumar Singh and Hon'ble Sri Justice G.M. Mohiuddin
Date of Order: 25th August, 2025

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