Facts of the Case

The petitioner, M/s Mandy Enterprises, a sole proprietorship concern run by Late Sh. Mandeep Singh Batra, was engaged in providing waste management services to government and local authorities since 2014. Upon his demise on 10.10.2021, his widow, Mrs. Neera Batra, acting as the legal heir, applied for a refund of ₹28,84,115/- lying in the electronic cash ledger.

A Show Cause Notice dated 25.07.2023 was issued questioning the refund claim on the ground of non-compliance with Section 49(6) of the Central Goods and Services Tax Act, 2017. Despite submitting a reply, the adjudicating authority rejected the refund claim.

Subsequently, the petitioner filed an appeal under Section 107 of the CGST Act, 2017, wherein the Appellate Authority allowed the appeal and directed refund of the amount to the petitioner’s bank account. However, despite clear directions, the refund was not processed by the authorities. Fresh applications and reminders were also ignored, leading to the filing of the present writ petition.

Issues Involved

  1. Whether tax authorities can withhold refund despite clear directions from the Appellate Authority.
  2. Whether re-initiation of proceedings via fresh Show Cause Notice is permissible after appellate order.
  3. Whether non-implementation of appellate orders violates statutory and judicial discipline. 

Petitioner’s Arguments

  • The petitioner contended that the Appellate Authority had conclusively allowed the refund claim and directed its disbursement.
  • Authorities acted illegally by not implementing the appellate order and issuing fresh notices.
  • The refund amount lying in the electronic cash ledger rightfully belonged to the petitioner as legal heir.
  • Non-compliance amounted to arbitrary exercise of power and denial of lawful entitlement.

Respondent’s Arguments

  • The respondents attempted to justify their actions by issuing fresh Show Cause Notices and re-examining the refund claim.
  • They relied on procedural grounds, including alleged non-compliance with statutory provisions under the CGST Act. 

Court’s Findings / Order

The Delhi High Court held:

  • Authorities cannot withhold refund once it has been directed by the Appellate Authority, unless the order is stayed by a superior forum.
  • It is impermissible for authorities to ignore binding appellate orders.
  • Issuance of fresh Show Cause Notice on the same issue was unjustified.
  • The matter is squarely covered by precedents including:
    • Alex Tour and Travel (P.) Ltd. v. Assistant Commissioner, CGST (2023: DHC:3303-DB)
    • Kunal International v. Union of India (2023: DHC:7316-DB)
    • G.S. Industries v. Commissioner CGST Delhi West (2023: DHC:2402-DB)

Final Order:
The Court allowed the petition and directed the respondents to forthwith process the refund along with applicable interest in accordance with law.

Important Clarification

  • Administrative authorities are bound by appellate orders and cannot reopen or delay implementation without lawful challenge.
  • Issuing repeated Show Cause Notices after appellate adjudication amounts to abuse of process.
  • Refunds under GST must be processed promptly, especially where entitlement is already adjudicated.

Sections Involved

  • Section 49(6), Central Goods and Services Tax Act, 2017
  • Section 107, Central Goods and Services Tax Act, 2017

Link to download the order -  https://delhihighcourt.nic.in/app/showFileJudgment/VIB17092024CW122142024_160451.pdf 

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