Case Law Details
Cognizant Technology Solutions India Private Limited Vs Assistant Commissioner of State Taxes (Telangana High Court)
The Telangana High Court disposed of a writ petition challenging the rejection of an IGST refund claim of Rs. 13,09,78,306/- filed by an SEZ Unit, holding that the petitioner should pursue the statutory appellate remedy instead of invoking writ jurisdiction.
The petitioner challenged the refund rejection order dated 08.12.2025, contending that the Refund Sanctioning Officer wrongly rejected the claim for refund of IGST paid on Group Health Insurance Services availed by its Special Economic Zone (SEZ) Unit. The petitioner argued that Section 16 of the Integrated Goods and Services Tax Act, 2017 read with Section 54 of the Central Goods and Services Tax Act, 2017 entitled it to a refund where the tax incidence had been borne by the recipient. It was further submitted that the authority had incorrectly treated the claim as one relating to zero-rated supplies, whereas the claim was for refund of tax paid on supplies received. The petitioner also asserted that Group Health Insurance Services formed part of the approved default list of SEZ services, were procured for employee welfare essential to IT/ITeS operations, and fell within the authorised operations of the SEZ Unit.
The petitioner further contended that the Refund Sanctioning Officer introduced new grounds in the rejection order that were not contained in the show cause notice, thereby denying an opportunity to respond. It was also submitted that the application for endorsement by the SEZ GST Officer remained pending, which hindered the petitioner’s ability to establish its refund claim before the Refund Sanctioning Authority. On these grounds, the petitioner sought the High Court’s intervention.
The State Tax Department raised a preliminary objection, submitting that an effective alternative remedy of appeal was available. It argued that all the issues raised by the petitioner concerned the merits of the refund claim, including whether the supplies qualified as zero-rated supplies or were otherwise eligible for refund, and that these issues were better examined by the appellate authority.
After considering the submissions, the High Court held that the questions relating to the nature of the refund claim and its eligibility were matters that could be properly raised and decided by the appellate authority on merits. Consequently, the Court declined to entertain the writ petition and directed the petitioner to avail the statutory appellate remedy, raising all available questions of law and fact before the appellate authority.
The Court further observed that if the appeal is filed within two weeks, the appellate authority should consider the issue of delay, if any, taking into account that the petitioner had been pursuing the matter before the High Court in writ jurisdiction. The writ petition was accordingly disposed of without any order as to costs, and all pending miscellaneous applications were closed.
FULL TEXT OF THE JUDGMENT/ORDER OF TELANGANA HIGH COURT
Heard Mr. Raghavan Ramabadran, learned counsel representing Mr. Lakshmi Kumaran Sridharan, learned counsel for the petitioner, and Mr. Swaroop Oorilla, learned Special Government Pleader appearing for State Tax.
2. The writ petition has been preferred assailing the refund rejection order dated 08.12.2025 rejecting petitioner’s claim for refund of Integrated Goods and Services Tax (IGST) amount of Rs.13,09,78,306/- on Group Health Insurance Services availed by Special Economic Zone (SEZ) Unit. Out of the number of grounds taken by the petitioner one of them is that the Refund Sanctioning Officer erroneously denied the refund to the petitioner SEZ Unit despite Section 16 of the Integrated Goods and Services Tax Act, 2017 and Section 54 of the Central Goods and Services Tax Act, 2017 for getting refund where the tax incidence has been borne by the recipient. The Refund Sanctioning Authority has confused the claim of refund as being under zero-rated supplies falling within the SEZ. Whereas, the petitioner’s claim is purely a refund against supplies made. The authority has wrongly treated Group Health Insurance Services as personal consumption overlooking that such services are covered under the approved default list of SEZ services and were procured for employees welfare essential to IT/ITeS operations and also fall within the authorised operations of the SEZ Unit. The officer has introduced new grounds which were never raised in the show cause notice denying petitioner an opportunity to respond. Therefore, petitioner has preferred this writ petition taking inter alia a number of grounds. The claim relates to the period November, 2023 to December, 2023. The application for endorsement of the SEZ GST Officer has been kept pending which is another handicap for the petitioner to establish its claim before the Refund Sanctioning Authority. Therefore, this Court may entertain this writ petition.
3. Learned Special Government Pleader for State Tax has at the outset taken the plea of alternative remedy of appeal. He submits that all these grounds are available to be raised before the appellate authority. The grounds urged by the petitioner are in relation to the merits of the claim whether it falls under supplies made to the insurance authorities or were to be treated as zero-rated supplies in respect of a unit falling in the SEZ zone. The appellate authority would be in a better position to examine the rival claims.
4. We have considered the submissions of the learned counsel for the parties and taken note of the relevant materials referred to and placed on record.
5. In the facts and circumstances noted above, whether the claim for refund made by the petitioner, which is a SEZ Unit, is outside the scope of zero-rated supply and is a simplicitor claim of refund against supplies made to the insurance company are matters which can be properly raised and decided by the appellate authority on merits. Therefore, we are not inclined to entertain the writ petition at this stage. The petitioner may avail the remedy of appeal taking all such grounds of law and fact as are available to it. Needless to say, if an appeal is filed within a period of two weeks, the appellate authority would consider the question of delay, if any, taking into account that the petitioner was pursuing its remedy before this Court in writ jurisdiction against the refund rejection order dated 08.12.2025.
6. The writ petition is accordingly disposed of. No order as to costs.
Miscellaneous applications pending, if any, shall stand closed.
Author Bio
