Appellate Order Setting Aside GST Refund Rejection Doesn't Bar Fresh Examination Of Claim: Delhi HIgh Court

The Delhi High Court has held that an appellate order setting aside the rejection of a GST refund claim does not automatically entitle the assessee to an unconditional refund, nor does it bar tax authorities from examining the claim afresh on other legally permissible grounds.

A Division Bench of Justices Anil Kshetrapal and Shail Jain made the observation while dismissing a writ petition filed by M/s Karamsar Poultry Appliances, which had challenged an order rejecting its refund claim of ₹3.44 lakh, which it claimed arose from an appellate order passed in its favour.

The petitioner had sought a refund of unutilised input tax credit for the period between July and September 2019. While the Assistant Commissioner had partially sanctioned the claim in October 2021, refund to the extent of ₹3.44 lakh was rejected. The appellate authority subsequently allowed the assessee's appeal and set aside the rejection order in September 2025.

Thereafter, the Assistant Commissioner once again rejected the refund application, prompting the Petitioner to approach the High Court.

Petitioner argued that since the appellate order had attained finality, the refund amount along with statutory interest ought to be released and that it could not be relegated to the alternative remedy of appeal.

Opposing the plea, the revenue authorities contended that the impugned order contained detailed reasons for refusing the refund and that the petitioner had an effective statutory remedy under the Central Goods and Services Tax Act, 2017.

After considering the submissions, the Court noted that the Assistant Commissioner had independently examined the refund claim and recorded reasons for rejecting it.

It further observed that the appellate authority had merely set aside the earlier rejection order on the grounds considered therein and had not directed unconditional release of the refund amount.

The Court observed, “Notably, the OIA neither directed unconditional release of the refund amount nor foreclosed examination of the Petitioner's entitlement on any other legally permissible ground.”

“Consequently, the Assistant Commissioner cannot be said to have been precluded from examining the refund claim afresh on grounds distinct from those which stood negated by the Appellate Authority,” it added.

The Court further held that the question of whether the refund had been validly rejected on fresh grounds would require examination on merits and could not be adjudicated in writ proceedings.

Since an appeal under Section 107 of the CGST Act was available against the impugned order, the Court declined to exercise its writ jurisdiction.

For Petitioner: Advocate Antik Majumder

For Respondent: Advocate Akash Panwar, JSC along with Abhimanyu Kapoor for R-1 and 2. Advocate Kshitij Chhabra, SPC along with Mr. Rahul Morya, GP for R-3.