Prima Facie Contempt Found as GST Refund Claim Was Rejected Despite Court Orders

Triune Project Private Limited Vs Commissioner of State GST Department of Trade Department of Trade And Taxes Delhi & Ors. (Delhi High Court)

The petitioner filed a refund application in Form GST RFD-01 on 30.11.2023 under Section 54(3) of the CGST Act, 2017 for the period April 2020 to March 2022, seeking a refund of ₹70,09,455. As the application remained undecided, the petitioner approached the Delhi High Court through a writ petition. By order dated 28.03.2025, the Court directed the respondents to grant the refund along with statutory interest within four weeks.

When the order was not complied with, the petitioner filed an application seeking directions for compliance. On 16.07.2025, the Court recorded the respondent’s submission that the refund application had inadvertently been sent to the wrong ward officer, causing delay. The petitioner was permitted to file a fresh refund application, and the refund was directed to be processed expeditiously.

Subsequently, a status report filed by the department stated that there was a discrepancy in the petitioner’s returns. On 12.12.2025, the Court observed that the procedure to be followed in case of such a mistake did not appear to have been brought to the notice of the Bench while passing the order dated 28.03.2025. The matter was directed to be placed before the same Bench. The petitioner also expressed willingness to file an amended manual return.

On 13.02.2026, the Bench that had passed the original order held that no clarification of the order dated 28.03.2025 was required, observing that the writ petition had been disposed of in light of an earlier judgment and that the petitioner could take steps in accordance with law for compliance of the order.

The petitioner thereafter initiated contempt proceedings alleging non-compliance of the refund order. During the contempt proceedings, the respondent submitted that the matter was under active consideration and that necessary steps would be taken to grant the refund in accordance with the directions contained in the orders dated 28.03.2025 and 13.02.2026. On 13.03.2026, the Court directed compliance within three weeks and disposed of the contempt petition.

However, on 24.03.2026, the respondent passed an order rejecting the petitioner’s refund claim. The petitioner contended that, after the Court’s orders, the respondent was required to comply with the refund direction and could not reject the claim. It was also submitted that the issue of alleged shortfalls had already been considered by the Division Bench while passing the order dated 28.03.2025.

Upon a prima facie reading of the previous orders, the Court observed that the respondents appeared to be in contempt of the order dated 28.03.2025. Nevertheless, since the respondent sought time to file a response, the Court granted four weeks’ time for filing the response, with two additional weeks for any rejoinder. The matter was directed to be listed for further consideration on 30.07.2026.

FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT

1. For the Financial Year April, 2020 to March, 2022, the petitioner on 30^th November, 2023, took recourse to the provisions of Section 54(3) of the CGST Act, 2017 seeking refund in the Form GST RFD-01.

2. Since the said proceedings were not decided, the petitioner approached this Court through Writ Petition (Civil) No. 14121 of 2025, which was allowed vide order dated 28^th March, 2025, in terms of prayer clause (i), which reads thus:

(i) Issue a writ in the seeking writ of mandamus and/ or any other appropriate writ, directing the respondent department to sanction the refund claims filed by the Petitioner under. Refund Application dated 30.11.2023 (Reference no.AA071123082463F) for the amount of Rs. 70,09,455/- for the period April 2020 to March 2022, along with the applicable interest as per the provisions of the Central Goods and Service Tax Act, 2017 and rules made thereunder;

3. Since the aforesaid order was not complied with, the petitioner took out an application under Section 151 of Code of Civil Procedure, 1908, seeking directions for compliance of the aforesaid order by the respondent.

4. The said application was considered by the Division Bench of this Court and vide order dated 16t^h July, 2025, the Division Bench made following observations:

“1. This hearing has been done through hybrid mode.

CM APPL. 41655/2025 (for non-compliance of the order dated 28^th March, 2025)

2. The present application has been filed by the Petitioner under Section 151 of the Code of Civil Procedure, 1908 seeking directions for compliance of the order dated 28th March, 2025.

3. Vide order dated 28th March, 2025, refund was directed to be given to the Petitioner within a period of four weeks along with statutory interest. Relevant portion of said order reads as under:

“5. Resultantly, the writ petition is answered in terms of Prayer (i) and stands disposed of The Respondent is directed to ensure that the refund is given to the Petitioner within a period of four weeks from today alongwith statutory interest.”

4. According to the Petitioner, the refund amount has not been disbursed to the Petitioner.

5. Accordingly, let the concerned Official of the Respondent Department be present before the Court on the next date of hearing.

6. At this stage, Mr. Abhinav Sharma, Id. Counsel for the Respondent submits that the Petitioner’s application had inadvertently been sent to a wrong ward officer which resulted in the delay in the refund being disbursed.

7. Considering the same, let the Petitioner file a fresh application seeking the refund within one week. Once the application is filed, the refund shall be processed expeditiously, without fail.

8. List on 12th September, 2025.”

5. Since, vide aforesaid order, this Court permitted the petitioner to file a fresh application in view of default of the respondent in the matter of processing the earlier application, and the refund was directed to be processed.

6. Thereafter, the matter was again listed before this Court on various occasions and on 12t^h December, 2025, the Court again considered the application of the petitioner in regard to the prayer for non-compliance and passed the following order:-

“1. This hearing has been done through hybrid mode.

CM APPL. 41655/2025 (seeking intervention) in W.P.(C) 14121/2024

2. This is an application filed by the Petitioner under Section 151 of the Code of Civil Procedure, 1908 seeking compliance of the order dated 28th March, 2025. Vide the said order, refund was directed to be issued to the Petitioner in the following terms:

“5. Resultantly, the writ petition is answered in terms of Prayer N and stands disposed of. The Respondent is directed to ensure that the refund is given to the Petitioner within a period of four weeks from today alongwith statutory interest.”

3. In response to this application, a status report has been filed on behalf of Respondent No.1 where it appears that the stand of the Department is that there is a discrepancy in the returns filed by the Petitioner.

4. In the reply to the status report, as per the Department, the said mistake is admitted by the Petitioner.

5. The question as to what procedure should be followed if there is a mistake in the return does not appear to have been brought to the notice of the Bench when the order dated 28th March, 2025 was passed.

6. Accordingly, subject to orders of Hon’ble the Chief Justice, list this matter before the same Bench which passed the order dated 28th March, 2025 on 17th December, 2025.

7. At this stage, Mr. Garg, Id. Counsel for the Petitioner is willing to file an amended manual return.

8. Let the said request be made before the said Bench on 17th December, 2025. “

7. As a sequel of the aforesaid order dated 12^th December, 2025, the matter was again placed before the Court who has passed the earlier order dated 28t^h March, 2025.

8. The Bench dealing with the matter on 13t^h February, 2026, has refused to go into the clarification, saying that the order is quite clear and no further clarification is required, and it was directed that the present petitioner can take appropriate steps in the matter.

9. This led to the petitioner filing the Contempt proceedings, being CONT.CAS(C) 402 of 2026. The said contempt petition was disposed of vide order dated 13t^h March, 2026, and the order passed in the Contempt proceedings reads thus:-

“1. The present petition alleges wilful disobedience of the judgment/order dated 28.03.2025, passed in W.P. (C) 14121/2024. The same reads as under:

2. Subsequently, an order dated 13.02.2026 was passed in CM APPL.41655/2025 in the aforesaid proceedings. The same reads as under:

“CM APPL. 41655/2025

1. This is an Application filed by the Petitioner under Section 151 of the Code of Civil Procedure, 1908 seeking compliance of the Order dated 28.03.2025.

2. In the opinion of this Court, the Order dated 28.03.2025 does not require any clarification, since the Writ Petition was disposed of in light of the Judgment passed by a Co-ordinate Bench in M/s Jian International versus

Commissioner of Delhi Goods and Services Tax, 2020 SCC OnLine Del 2606.

3. Needless to state, it is open for the Applicant to take necessary steps in accordance with law for compliance of the Order dated 28.03.2025.

4. With the above observations, the Application is disposed of “

3. The petitioner is aggrieved by the fact that the requisite refund has still not been granted to the petitioner, despite the aforesaid directions.

4. Learned counsel for the respondent submits that the matter is under active consideration of the department and that the requisite steps shall be taken to furnish the refund due to the petitioner, in terms of the directions contained in the judgment / order dated 28.03.2025 read with order dated 13.02.2026, and in accordance with law.

5. Let necessary compliance be done within a period of three weeks from today.

6. The petition is disposed of in the above terms.”

10. It appears that subsequent to the aforesaid order, the impugned order came to be passed by the respondent on 24t^h March, 2026, thereby the request of the petitioner for refund came to be rejected.

11. The counsel for the petitioner submits that in the wake of the order of this Court on 13t^h February, 2026 based on CM Appl. No. 41655 of 2025 (referred above), and the order of this Court that no further clarification is required, particularly, recorded in the order dated 13t^h February, 2026. The option left with the respondent was to comply with the order in terms of prayer clause (i) as directed vide order dated 28t^h March, 2025.

12. As regards the issue of shortfalls is concerned, the same issue was duly gone into by the Division Bench of this Court while passing the aforesaid order dated 28t^h March, 2025. In spite of above, when there were positive directions to refund the tax to the petitioner, the respondent, by passing the order dated 28t^h March, 2025 and the subsequent orders, have chosen to reject the claim of the petitioner for refund of tax.

13. Prima facie, upon a plain reading of the aforesaid orders, we are of the view that the respondents are in contempt of the order dated 28t^h March, 2025.

14. Be that as it may, since the counsel for the respondent has sought time to file a response, we grant time of four weeks, as prayed by the counsel for the respondent, for the same.

15. Rejoinder, if any, be placed on record within two weeks thereafter.

16. Post matter for consideration on 30t^h July, 2026.