GST: Delhi HC Orders Refund with Interest as Deficiency Memo Missing; Allows Delayed Appeal on First Claim

The company, Sisla Laboratories, filed two refund applications in May and June 2019. The company also claimed that a letter to grant refund was also written in 2023, but it has not been processed till now. Therefore, the company filed a petition to get help with these pending GST refund applications.

As per the CGST Department, the first refund application dated July 9, 2019, was dismissed after issuing a show cause notice dated 05.07.2019 and an order dated 19.09.2019. However, the petitioner claimed that it was unaware of both the SCN and the order, as both documents were uploaded online on the GST portal. As per the company, it was not given the opportunity to be heard before rejecting the refund application.

The company also submitted regarding the second refund application dated 12.06.2019, stating that the Department said that it issued a deficiency memo, but the record could not be traced.

The Delhi High Court observed that the company only found out about the rejection in February 2025. Therefore, the court allowed the company to file an appeal under Section 107 of the GST Act within one month, and it shall not be dismissed because of delay.

The department stated that the deficiency memo could not be traced for the second refund application. The court held that this is not a valid reason to hold the refund, so the High Court directed the Department to process the refund and pay the amount along with interest from the date of the application (12.06.2019) within two months.