Case Law Details
Ma Agro Vs Deputy Commissioner of State Tax (Bombay High Court)
The Bombay High Court dealt with a writ petition filed by the petitioner seeking enforcement of an appellate order directing refund of a substantial GST amount. By an order dated 21 August 2025, the Appellate Authority had directed the Deputy Commissioner of State Tax to refund ₹7,27,83,010 to the petitioner along with applicable interest under Section 56 of the Central Goods and Services Tax Act, 2017. Despite this clear direction, the refund was not released.
The petitioner approached the High Court contending that the tax authorities were delaying compliance with the appellate order on the ground that an appeal against the said order was contemplated. It was argued that mere intention to file an appeal could not justify non-implementation of a binding appellate order. Reliance was placed on a decision of the Delhi High Court which held that withholding refunds on the ground of a proposed appeal would undermine the rule of law.
On 25 November 2025, the Court heard the parties and granted time to the State to obtain instructions. When the matter was taken up again, the State sought further time. Since the Court had already indicated that the petition would be disposed of at the admission stage, it proceeded to decide the matter.
The Court observed that as long as the appellate order dated 21 August 2025 was neither stayed nor set aside by a competent forum, the tax authorities were bound to comply with it. The Court held that the respondent could not refuse to grant the refund merely because an appeal was contemplated. Ignoring a subsisting appellate order on such grounds was found to be impermissible.
Accordingly, the petition was allowed. The Court directed the respondent to refund the amount of ₹7,27,83,010 to the petitioner within ten days from the date of uploading of the order. The Court further directed that if the refund was not made within the stipulated time, the respondent would be liable to pay additional interest at the rate of 6% per annum over and above the statutory interest payable under the GST law.
Importantly, the Court clarified that such additional interest should first be paid to the petitioner and thereafter recovered from the officer or officers responsible for the delay after holding an inquiry. The Court specifically directed that under no circumstances should the State or Central exchequer be burdened with payment of additional interest from public funds. The rule was made absolute without any order as to costs, and directions were issued to ensure that all concerned authorities acted promptly on the authenticated copy of the order.
The decision was rendered by the Bombay High Court.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
On 25 November 2025, after hearing the parties, we made the following order:-
“1. Heard learned counsel for the parties.
2. The learned counsel for the Petitioner submits that by order dated 21 August 2025 the Appellate Authority has directed the first Respondent to refund the Petitioner an amount of Rs.7,27,83,010/- along with interest under Section 56 of the Central Goods and Services Tax, 2017 (CGST Act). He further submits that despite this order, the Respondents are delaying the grant of actual refund along with interest on the ground that an Appeal is going to be filed against the Appellate Authority’s decision.
3. He relies on the decision of the Delhi High Court in the case of Brij Mohan Mangla vs. Union of India & Ors.(2023 (3) TMI 327) in which, it is held that refunds cannot be delayed on the ground that Appeals are in contemplation.
4. Vyas, the Additional Government Pleader seeks some time to obtain instructions.
5. In order to enable Ms. Vyas to obtain instructions, we post this matter on 9 December 2025 for directions/disposal at the admission stage.”
2. By today, we expected Ms Vyas to be ready with the instructions. However, she once again is constrained to seek some time.
3. Since we had already issued a notice that this Petition would be disposed of at the admission stage, we proceed to do so.
4. Accordingly, we issue the Rule and make it returnable immediately, in accordance with our order of 25 November 2025, and with the consent of the learned counsel for the parties.
5. By order of 21 August 2025, the Appellate Authority has directed the first Respondent to refund the Petitioner an amount of Rs. 7,27,83,010/- along with applicable interest under Section 56 of the CGST Act. The Petitioner has approached the first Respondent with the request for compliance with the Appellate Authority’s order dated 21 August 2025.
6. The Petitioner has pleaded that the Petitioner was informed that an Appeal was contemplated against the order of 21 August 2025 and that, as a result, the refund was not granted to the Petitioner.
7. The learned counsel for the Petitioner relies on the decision of the Delhi High Court in the case of Mr Brij Mohan Mangla vs. Union of India & Ors.1, which holds that the Respondents cannot ignore the orders made by the Appellate Authority merely because they have decided to appeal against those orders. The Delhi High Court observed that it would be debilitating to the Rule of law if the Respondents are permitted to withhold implementation of the orders passed by the Appellate Authority on such grounds.
8. As long as the Appellate Authority’s order dated 21 August 2025 is not set aside or stayed, the first Respondent cannot refuse to comply with the same.
9. Accordingly, we allow this Petition and direct the first Respondent to refund the Petitioner the amount of Rs. 7,27,83,010/- within 10 days from the date of uploading of this order. If this is not done, the first Respondent will have to pay interest, over and above any statutorily payable interest, @ 6% per annum. Such additional interest will have to be first paid by the Respondents to the Petitioner, and thereafter the Respondents will have to hold an inquiry, determine the liability, and recover this additional amount from the officer/officers responsible for the delay. Under no circumstances should the State/Central Exchequer be made accountable for payment of additional amounts from out of the taxpayers’ funds.
10. The Rule is made absolute in the above terms without any order for costs.
11. All concerned must act on an authenticated copy of this order.
12. An authenticated copy of this order must be brought to the notice of the second and third Respondents so that they too can take emergent and appropriate action in this matter.
Notes:-
1 2023 (3) TMI 327
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