GST refund was allowed by the Appellate Authority and no stay was granted by the Tribunal, yet refund was withheld — Delhi High Court directed release of the deposited refund amount to the Assessee.

Issue:
Whether the Department could continue to withhold the GST refund amount merely because appellate proceedings were proposed/pending, when the refund rejection order had already been set aside and no interim stay had been granted by the Tribunal.

Rule :
When a refund rejection order is set aside by the competent appellate authority, the refund is required to be processed in accordance with the “GST Act and Rules”. Mere pendency of appellate remedy does not, by itself, operate as a stay unless a specific interim order restraining refund is passed by the competent forum.

Application:
The Assessee’s refund claim for April 2022 to March 2023 had been rejected by the Proper Officer in GST RFD-06. The Objection Hearing Authority/Additional Commissioner had allowed the Assessee’s appeal and set aside the refund rejection order. Despite earlier directions of the High Court to process and release the refund with statutory interest, the Department had not released the amount and had instead pursued further proceedings.
The refund amount was thereafter deposited before the Registrar General of the High Court. Since the Department had been relegated to pursue statutory appeal before the Tribunal and admittedly no interim order had been passed by the Tribunal preventing release of refund, there was no legal justification to continue withholding the amount from the Assessee.

Conclusion:
The Delhi High Court directed that the refund amount lying deposited with the Court be released to the Assessee after expiry of three weeks, subject to any further order that may be passed in the pending appellate proceedings before the Tribunal.

Impact Analysis:
This judgment reinforces that pendency of appeal is not an automatic stay against refund. Once refund rejection is set aside, the Department must either obtain a specific stay or release the refund in accordance with law.
Title: TRUTH FASHION vs. S.K SINGH SPECIAL COMMISSIONER
Court: HIGH COURT OF DELHI AT NEW DELHI
Citation: 101 TLC(GST) 061
Dated: 04-05-2026