GST Update

Desk of CA. Praveen Sharma – 849 Series (CAPS)

Delhi High Court in the case of Moms Cradle Private Limited

Refund Withheld & Delay in GST Appeal Filing

Background:
M/s Moms Cradle Pvt. Ltd., a garment exporter, filed writ petitions against (i) withholding of its sanctioned refund of ?32.52 lakh and (ii) seeking leave to file a delayed appeal against an Order-in-Original dated 04.02.2025 that raised ITC-related demands.

Refund Dispute:
The firm exported goods after paying IGST and claimed refunds totalling ?78 lakh. Following appellate proceedings, ?32.52 lakh was allowed, but the amount remained withheld due to a pending demand for alleged fraudulent ITC availment.

Department’s Stand:
The Revenue argued that since a demand of ?42.76 lakh stood raised under the Order-in-Original, any refund was liable to be adjusted against that liability under Section 54(11) of the CGST Act.

Petitioner’s Claim:
The company contended that its director was unwell and that the order uploaded on the GST portal was illegible; hence, it missed the statutory time window to appeal under Section 107.

Revenue’s Rebuttal:
The department produced evidence that the order had been duly emailed to the registered address, and that the director had participated in adjudication proceedings, negating any claim of ignorance.

Court’s View on Limitation:
Citing its earlier decision in Addichem Speciality LLP v. Special Commissioner (2025), the Court reiterated that Section 107 provides a strict appeal timeline of three months plus one month grace, beyond which delay cannot be condoned, even by writ jurisdiction.

Findings:
The Court held there was no breach of natural justice since the petitioner participated in proceedings. Non-filing of appeal within the prescribed limit made the request legally untenable.

Outcome:
The writ for condonation was dismissed. The Court directed that the refund amount, once processed, be adjusted against the outstanding demand as per law. The petitioner may seek revival only if the Supreme Court later alters the position on appeal limitation.

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Regards 
CAPS