The Gujarat High Court has directed the refund of ₹5,41,032 collected as GST and penalty after holding that relief already granted by an appellate authority should not be defeated merely because the summary of its order was uploaded belatedly on the GST portal.
The Division Bench of Justice A.S. Supehia and Justice Vaibhavi D. Nanavati granted relief in the peculiar circumstances of the case, while clarifying that physical communication of an appellate order ordinarily starts the two-year limitation period for claiming a refund under Section 54 of the Central Goods and Services Tax Act, 2017. A taxpayer is generally not required to wait for the uploading of the order’s summary in Form GST APL-04 before applying for a refund.
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The bench nevertheless observed that the delayed portal upload, the existing appellate direction to refund the money, and the company’s application filed immediately after the upload justified relief. It ordered payment with 6% interest from August 15, 2024, and stipulated enhanced interest of 9% per annum after 12 weeks if its directions were not implemented within that period.
The proceedings arose from the transportation of chemicals purchased by the assessee from Dasaldhan Chemicals Private Limited, Bharuch, under an invoice dated November 25, 2019.
The goods were being transported from Bharuch to Bhavnagar under an e-way bill generated on November 26, 2019, and valid until November 29, 2019. On November 27, a State Tax mobile squad intercepted the vehicle at Nari Gam in Bhavnagar.
The authorities alleged that the e-way bill had been rejected and initiated proceedings under Section 129 of the CGST Act. An order dated November 29, 2019, imposed tax and penalty aggregating to ₹5,41,032. The company deposited the amount to secure the release of the vehicle and goods.
The company successfully challenged that demand. By an order dated February 28, 2022, the appellate authority found that the e-way bill was active and had not been rejected. It also found no intention to evade tax.
The appellate authority set aside the demand and directed the refund of the amount deposited, subject to verification of the company’s tax liability.
A physical copy of the appellate order was handed over to the company’s authorised representative on March 8, 2022. However, the summary of that order in Form GST APL-04 was uploaded on the GST portal only on June 3, 2024.
The company submitted its refund application on June 4, 2024—the very next day.
After issuing a notice seeking a copy of the detailed appellate order, which the company supplied, the refund authority rejected the claim on July 10, 2024. The company’s appeal against that rejection was dismissed on January 30, 2025.
The authorities treated March 8, 2022, as the date of communication of the appellate order. They consequently held that the refund application had been filed beyond the two-year limitation period prescribed under Section 54(1).
The central legal issue was whether limitation should run from the date on which the physical appellate order was received or from the subsequent uploading of its summary on the GST portal.
The company argued that communication was complete only when the appellate order and its summary became available on the portal. It also contended that the State could not retain money after the underlying demand had been set aside and an express refund direction had been issued.
The State maintained that the appellate order had already been communicated on March 8, 2022. It argued that Form GST APL-04 was merely a summary and that its later upload could not extend the statutory limitation period.
The State further submitted that the refund application could have been filed using the portal option for an order received offline, without waiting for the summary to be uploaded.
The High Court accepted the State’s interpretation of the ordinary statutory position.
Referring to Explanation 2(d) to Section 54, the Bench observed that where tax becomes refundable because of an appellate or judicial order, the relevant date is the date of communication of that order.
Since receipt of the physical appellate order on March 8, 2022, was undisputed, that date would ordinarily govern limitation.
The Court also examined Rule 89 and Form GST RFD-01 and found that neither required a taxpayer to await the uploading of Form GST APL-04 before seeking a refund.
Accordingly, the Court concluded that, on ordinary computation, the two-year period expired on March 8, 2024, making the application filed on June 4, 2024, belated.
The Bench then considered whether the refund could nevertheless be denied in the specific circumstances before it.
It noted that the appellate authority had already set aside the demand and expressly directed repayment. Continued retention of the amount therefore raised questions under Article 265, which prohibits taxation without authority of law, and Article 300A, which protects property against deprivation without authority of law. The Court also referred to Article 19(1)(g), concerning the right to carry on a profession, occupation, trade or business.
The Bench reasoned that procedural requirements should facilitate justice rather than frustrate substantive relief. It placed particular emphasis on the company having applied for refund immediately after the department uploaded the appellate summary.
For the limited purpose of deciding this refund claim, the Court therefore treated June 3, 2024, as the relevant date. On that basis, the application filed the following day was held to be within time.
The judgment does not establish a general rule that uploading Form GST APL-04 restarts limitation. The Court expressly confined its relief to the peculiar circumstances of this case and clarified that the word “may” in Section 54(1) does not, by itself, make the statutory limitation period optional.
The Court emphasised that tax authorities must act fairly, transparently and in accordance with law when implementing appellate decisions.
It observed that retaining the money despite the appellate refund direction would indirectly revive the effect of the original tax and penalty demand that had already been set aside.
The authorities were expected to facilitate implementation of appellate orders, including informing taxpayers about the statutory refund process where necessary, and to avoid procedural impediments that could defeat relief already granted.
The High Court quashed both the refund rejection order dated July 10, 2024, and the appellate order dated January 30, 2025.
It directed the authorities to process the company’s refund application dated June 4, 2024. If the portal prevented filing or processing, the company was permitted to submit a fresh offline application.
On interest, the Bench declined to award it from the date of the original appellate order, observing that the company had not applied for refund after receiving the physical copy. Although it discussed the higher interest contemplated under the proviso to Section 56, the company’s counsel restricted the claim to 6%.
The Court accordingly directed payment of ₹5,41,032 with 6% interest from August 15, 2024, until actual payment. It ordered implementation within 12 weeks, failing which the company would become entitled to 9% interest per annum on the refund amount after that period.
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