Brij Mohan Mangla Vs Union of India & Ors. (Delhi High Court)
The Delhi High Court considered a writ petition seeking directions to disburse GST refund of ₹74,02,337 for the period May 2019 to December 2019, along with interest, in implementation of the Appellate Authority’s order dated 20.09.2021. The petitioner had claimed refund of accumulated Input Tax Credit (ITC) under Section 54(3) of the CGST Act on account of an inverted duty structure through six refund applications. The refund claims were rejected on the grounds that physical verification showed the business was non-existent at the declared premises and that the petitioner’s GST registration had been cancelled with effect from 19.02.2021. The Appellate Authority allowed the petitioner’s appeals, holding that the petitioner had carried on business from the declared premises during the relevant period, had shifted thereafter, was a registered person when the refund applications were filed, and was therefore entitled to claim refund under Section 54(3). It also directed restoration of the GST registration. Despite these appellate orders, the respondents repeatedly issued deficiency memos and rejected subsequent refund applications on the same grounds while stating that they intended to challenge the appellate orders. The High Court held that, in the absence of any stay of the appellate orders, the respondents could not ignore or withhold their implementation merely on the basis of a proposed appeal. The Court observed that permitting such conduct would be contrary to the rule of law and referred to its earlier decision in W.P.(C) 5462/2022 decided on 16.02.2023. Accordingly, the writ petition was allowed, and the respondents were directed to forthwith process the petitioner’s refund claims along with interest. The Court clarified that the respondents remained free to pursue statutory remedies against the appellate orders and, if successful, could take consequential recovery action in accordance with law.
