Union of India & Ors. Vs HCC VCCL Joint Venture (Supreme Court of India)
Refund Cannot Be Kept In Abeyance Without recorded Reasons Under Section 108 Of CGST Act: Supreme court Upholds Delhi High Court Order.
On July 9, 2025, the Supreme Court of India upheld the Delhi High Court’s decision, emphasizing that refunds cannot be held in abeyance without recorded reasons under Section 108 of the CGST Act. This ruling, in the case of UNION OF INDIA & ORS. VERSUS M/S. HCC VCCL JOINT VENTURE, reiterates the importance of natural justice and procedural fairness, mandating a “speaking order” when interfering with a refund sanction order.
Background of the Case: The petitioner had been granted a refund sanction order on December 9, 2022, under the CGST Act, 2017. However, the Commissioner subsequently invoked Section 108 of the CGST Act, which pertains to the revision of orders, and placed the refund sanction order in abeyance. Critically, the order to hold the refund in abeyance lacked any recorded findings or reasoning to justify why the initial refund order was deemed unsustainable or erroneous.
The petitioner challenged this decision before the Delhi High Court. The High Court ruled in favor of the petitioner, stating that the Commissioner’s action was unsustainable due to the absence of recorded reasons or prima facie evidence of illegality, as required by Section 108 of the CGST Act. Consequently, the High Court quashed the abeyance order and directed the Revenue to release the refund amount.
