Delhi High Court Refuses Writ Interference in GST Refund Rejection Case, Upholds GSTAT as Efficacious Remedy
Case Overview
Case: Mahanadi Exporttek Private Limited Vs Union of India
Court: Delhi High Court
Impugned Order Date: 22.08.2025
Refund Amounts in Dispute: ₹4,10,37,815 | ₹23,68,800 | ₹12,90,899
The Delhi High Court recently disposed of a writ petition filed by Mahanadi Exporttek Private Limited, a company incorporated under the Companies Act, 2013, engaged in the export of mobile phones, desktops, laptops, and allied electronic items. The petition challenged an appellate order dated 22.08.2025 that had confirmed the rejection of three GST refund applications filed by the assessee under Section 54 of the Central Goods and Services Tax Act, 2017 (CGST Act). The Court declined to exercise writ jurisdiction and directed the assessee to pursue the statutory appellate remedy before the Goods and Services Tax Appellate Tribunal (GSTAT) under Section 112 of the CGST Act.
Background and Factual Matrix
Refund Applications and Show Cause Notices
The assessee, registered under GSTIN 07AARCM3030A1ZV, had submitted three refund applications on 20.09.2024, 21.09.2024, and 19.10.2024 under Section 54 of the CGST Act seeking refund of amounts aggregating to over ₹4.46 crore across the three applications.
In response, Respondent No. 3 (the adjudicating authority) issued three show cause notices — two on 15.10.2024 and one on 04.11.2024 — in Form GST RFD-08, proposing rejection of the refund claims on the following grounds:
- Non-submission of shipping bills
- Absence of verifiable bank statements
- Non-furnishing of bank realization certificates
- Failure to provide reconciliation of GSTR-1, GSTR-2B, and GSTR-3B
- Concerns arising from DGARM Alerts issued against certain suppliers of the assessee whose GST registrations had been cancelled on account of suspicious transactions and lack of verification
The assessee was granted 10 days to file replies, along with an option to designate a preferred date for personal hearing. In response to the notices dated 15.10.2024, the assessee opted for a hearing on 28.10.2024. For the notice dated 04.11.2024, the personal hearing was designated for 11.11.2024.
Replies Filed and Orders-in-Original
The assessee filed three replies — two on 26.10.2024 and one on 21.11.2024 — enclosing supporting documentation and additionally informing the adjudicating authority that physical copies of bills and related records had been handed over to the CGST inspector during his inspection of the assessee's premises.
Notwithstanding these submissions, the adjudicating authority passed two Orders-in-Original dated 22.11.2024 and one Order-in-Original dated 05.12.2024, rejecting all three refund applications. The authority noted the existence of DGARM Alerts against certain suppliers and observed inadequacies in the verification of underlying transactions.
Appeals Before the Appellate Authority
Aggrieved by the Orders-in-Original, the assessee filed three appeals under Section 107 of the CGST Act read with Section 109 of the CGST Rules, bearing appeal numbers 587/2024, 588/2024, and 52/2025.
The appellate authority — Respondent No. 4 — granted the assessee personal hearings on 07.04.2025, 09.04.2025, 16.04.2025, and 24.04.2025. The assessee appeared through its Chartered Accountant during the hearing on 24.04.2025 and explained that in two of the three cases, only 3–4 suppliers were involved, and in the third case, though approximately 37 suppliers were involved, the DGARM alert pertained to only one supplier.
Despite these representations, Respondent No. 4 dismissed all three appeals vide the impugned Order-in-Appeal dated 22.08.2025, observing that in the absence of cogent evidence from the assessee, there existed credible grounds to question the genuineness of the transactions.