Facts of the Case

The petitioner, AJ Flight Reservations Pvt. Ltd., filed a refund application dated 31.01.2024 under Section 54 of the CGST Act seeking refund of ₹81,79,529 along with applicable interest.

It was contended that:

  • No deficiency memo had been issued by the department.
  • The statutory period of 60 days for processing the refund claim had already elapsed.
  • Despite compliance, the refund application remained pending without any action by the proper officer.

Issues Involved

  1. Whether the tax authorities are obligated to process refund applications within the statutory time limit prescribed under Section 54 of the CGST Act.
  2. Whether delay beyond 60 days without issuance of a deficiency memo is legally sustainable.
  3. Whether the High Court can direct expeditious disposal of refund claims under writ jurisdiction. 

Petitioner’s Arguments

  • The petitioner argued that the refund claim was duly filed and complete in all respects.
  • No deficiency memo was issued within the prescribed timeline, implying acceptance of the application.
  • The delay in processing the refund violated statutory provisions and caused financial prejudice.
  • The petitioner sought immediate release of refund along with interest under Section 54 of the CGST Act. 

Respondent’s Arguments

  • The respondents accepted notice and did not substantially dispute the pendency of the refund application.
  • The matter was left to the discretion of the Court for appropriate directions regarding processing of the refund claim.

Court’s Findings / Order

The Delhi High Court observed that:

  • The refund application had been filed and remained pending beyond the statutory period of 60 days.
  • No deficiency memo had been issued by the department.
  • Delay in processing refund applications defeats the intent of Section 54 of the CGST Act.

Order:

  • The proper officer was directed to expedite processing of the refund application.
  • The application must be disposed of within two weeks in accordance with law.
  • The petitioner was granted liberty to pursue further remedies if aggrieved by any subsequent order.

Important Clarification

  • The Court did not adjudicate on the merits of the refund claim.
  • It limited its intervention to ensuring timely administrative action.
  • The judgment reinforces that inaction by tax authorities is subject to judicial review.

Sections Involved

  • Section 54 – Refund of Tax: Central Goods and Services Tax Act, 2017
    • Provides for refund of tax, interest, or any other amount.
    • Mandates processing within a prescribed timeline (generally 60 days).

Link to download the order -  https://delhihighcourt.nic.in/app/showFileJudgment/SAS08052024CW65852024_153015.pdf

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