GST Department Must Decide Refund Applications Expeditiously, Any Delay Adversely Affects Business: Delhi High Court

The Delhi High Court has called upon the Goods and Services Tax Department to expeditiously process the refund applications filed by registered persons/ entities.

A division bench of Justices Prathiba M. Singh and Shail Jain observed, “As per the statutorily prescribed procedure, the refund applications have to be dealt with in a particular manner within the prescribed timelines as per law…if there is delay by the Department in processing and granting refunds, it has a cascading adverse effect on the business of the tax payers as well.”

The observation was made while dealing with a software company's plea for expeditious disposal of its refund applications.

Petitioner claimed to have paid an excess amount of Integrated Goods and Services Tax during the period from April, 2019 to June, 2020 of a sum of Rs. 1,87,84,018/-.

The refund applications were filed in April 2022 but were rejected vide orders dated 6th July, 2022 and 7th July, 2022 citing certain deficiencies. Revised refund applications were filed on 30th March, 2023 and 31st March, 2023 but Petitioner claimed that no deficiency memo was issued in terms of the timelines fixed.

For context, as per Rule 90(2) of CGST Rules, Deficiency Memo is to be issued within 15 days. Further, Section 54 of CGST Act stipulates to complete refund adjudication within 60 days.

Reliance was also placed on MS G S Industries v. Commissioner of Central Tax and GST Delhi West (2024) where the High Court had held that the Petitioner therein could not be denied interest for delay caused due to the deficiency memo not having been issued within the stipulated period.

Section 56 of the Act makes provision for grant of interest, if refund is delayed.

In the case at hand, the High Court was informed that Petitioner made repeated representations to the Department for disposal of its refund application, but to no avail.

Under these circumstances, the Court observed that the Respondent-Department ought to take a decision expeditiously on the refund applications, within one month in this case.

Appearance: Mr. Kishore Kunal & Mr. Aditya Rathore, Advs. for Petitioner; Mr. Akash Verma, SSC, CBIC for Respondent

Case title: Gameloft Software Private Limited v. Assistant Commissioner Of Central Tax, Range 152 & Anr

Citation: 2025 LiveLaw (Del) 1487

Case no.: W.P.(C) 16315/2025

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