Appellate Authority must verify assessee’s documents before reversing refund order: HC

By | October 9, 2025
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An appellate authority cannot reverse a sanctioned refund by ignoring evidence on the record.

Issue

Can a GST Appellate Authority reverse a refund that has already been sanctioned, on the grounds that proof of export was not properly considered, when the case record clearly shows that the taxpayer had in fact submitted the required proof and the original officer had duly verified it?

Facts

  • A petitioner, who had exported services, filed a refund claim for their zero-rated supply.
  • The jurisdictional officer (the adjudicating authority) verified the claim, which included the essential Bank Realization Certificates (BRCs) that prove the receipt of foreign currency. After being satisfied, the officer sanctioned the refund and issued an order in Form GST RFD-06.
  • However, the GST department’s own review cell was not satisfied with its officer’s order and filed an appeal against it. The main ground for the department’s appeal was that the sanctioning officer’s order did not sufficiently detail the BRCs and other documents.
  • The petitioner submitted a reply to the Appellate Authority, pointing out again that the BRCs had been filed and verified.
  • Despite this, the Appellate Authority ignored the petitioner’s reply and the clear record of verification in the original sanction order. It proceeded to reverse the sanctioned refund.

Decision

The High Court ruled decisively in favour of the assessee.

  • It held that the Appellate Authority’s order was contrary to the facts on record.
  • The authority had completely failed to consider the crucial evidence that was already on the file. This included the petitioner’s submission of the BRCs and, more importantly, the original sanctioning officer’s own verification record in Form GST RFD-06.
  • The court found the appellate order to be arbitrary, quashed and set it aside, and restored the original order that had correctly sanctioned the refund to the petitioner.

Key Takeways

  1. Appellate Authorities Must Examine the Full Record: An appellate authority has a legal duty to examine the entire record of the case before making a decision. This includes all the documents submitted by the taxpayer to the original authority and the detailed findings in the original order.
  2. You Cannot Ignore Evidence on File: A decision that is made by ignoring crucial and undisputed evidence that is already part of the case file is considered arbitrary and is a violation of the principles of natural justice. Such a decision will not be upheld by a higher court.
  3. Departmental Appeals Must Have Real Substance: When the tax department files an appeal against its own officer’s order, it must be based on a genuine and substantive error of fact or law, not on a superficial or incorrect reading of the case record.
  4. The Importance of the Original Order Record: The original officer’s record of having verified the necessary documents (as noted in Form GST RFD-06) is an important piece of evidence in itself. The appellate authority should have given due weight to the fact that a verification had already been completed by a proper officer.
HIGH COURT OF GUJARAT
Hitachi Energy India Ltd.
v.
Union of India
BHARGAV D. KARIA and Pranav Trivedi, JJ.
R/SPECIAL CIVIL APPLICATION NOS. 1824 and 3053 of 2024
AUGUST  21, 2025
Anand Nainawati, Adv. for the Petitioner. CB Gupta, Adv. for the Respondent.
JUDGMENT
1. Heard learned advocate Mr.Anand Nainawati for the petitioner and learned advocate Mr.C.B.Gupta for the respondents.
2. Rule, returnable forthwith. Learned advocate Mr.C.B.Gupta waives service of notice of rule for and on behalf of the respondents.
3.1. Both these petitions are filed against the orders dated 29th September, 2023 passed by the Appellate Authority reversing the order passed by the respondent No.3 sanctioning the refund to the petitioner.
3.2. The petitioner filed refund claim in Form GST-RFD-01 under the category of “Export of Goods/Services without payment of Tax” in terms of Section 54 of the Central/State Goods and Services Tax Act, 2017 (for short ‘the GST Act’) read with Rule 89 of the Goods and Service Tax Rules, 2017 (for short ‘the GST Rules’).
3.3. After verification of the refund claim, the respondent No.3 by the orders dated 22nd September, 2022 sanctioned the refund to the petitioner.
3.4. Such Adjudication Orders were reviewed by the Department and the Appeals in Form GST APL-03 dated 30th March, 2023 were filed before the Appellate Authority on the ground that the sanctioning authority ought to have mentioned the details of BRC and relevant documents evidencing the receipt of foreign remittance in respect of zero-rated services as per Rule 89(2)(c) of the GST Rules.
3.5. Upon receipt of the notice by the Appellate Authority, the petitioner filed reply contending that the petitioner had filed GST refund application along with all relevant documents which were examined and thereafter the respondent No.3 has passed the order sanctioning the refund. It was also contended that the petitioner has fulfilled the condition of Rule 89(2)(c) of the GST Rules by submitting the Statement-3 containing the number and date of the Invoices and have also uploaded Bank Realisation Certificates and details of FIRC for export of goods along with the reply. The petitioner also resubmitted all the Realisation Certificates along with the reply filed before the Appellate Authority, however, the Appellate Authority has passed the impugned order observing as under :
“5.3 It is a fact on record that the sanctioning authority have not mentioned the details of BRC/FIRC/other relevant documents evidencing receipt of remittances in respect Zero rated services as per Rule 89(2)(c) of the CGST Rules, 2017 for which refund is being claimed. The respondent submitted that they had fulfilled the condition of Rule 89(2)(c) of the CGST Act, 2017 wherein they had :-
(i)submitted and uploaded a Statement 3 containing the No. & Date of invoices and the relevant Bank Realization Certificates for all the invoices, as per the prescribed format in the GST Portal while filing the Refund Application in For RFD-01. Enclosing Statement-3 as Annexure-1;
(ii)uploaded the Bank Realization Certificate for all the Service Export Invoices as per the Statement 3, enclosing Form RFD-0l wherein proof of BRC uploaded is mentioned under “supporting documents” as specified in Annexure-2;
(iii)re-submitting the Bank Realization Certificates along with this Reply for all the Service Export Invoices in Annexure-3;
(iv)attached Screenshot of BRC attached in application evidencing the submission of the documents in the GST portal in Annexure.

However, the appellant did not submitted the details as mentioned in their reply.”

4. On perusal of the above order, it appears that the Appellate Authority has failed to take into consideration that the petitioner has filed the Bank Realisation Certificates along with the refund claim which have been verified by the respondent No.3 with the statement containing the number and date of Invoices.
5. It also appears that the Appellate Authority has failed to consider the order passed by the respondent No.3 in Form GST RFD-06 which contains the details with regard to the documents uploaded by the petitioner as well as the verification made by the respondent No.3 of such documents for sanctioning the refund. It is pertinent to note that the respondent No.3 has observed in the order sanctioning the refund as under:
‘DISCUSSION & FINDINGS:
3. I have carefully gone through the claim papers and the verification report.
4. I find that the instant refund claim of Rs. 120824806/- for the tax period April’ 2021 to June’2021 has been filed under the category ‘Exports of Goods/Services – w/o payment of Tax (Accumulated ITC)’.
On going through the claim papers and the verification report, the following facts emerge:-
4.1. The claimant has uploaded all the necessary documents with the refund claim in terms of rule 89(2) of the CGST Rules.
4.2. The refund claim is not hit by time bar and unjust enrichment.
4.3. All the due return have been filed by the claimant and a dues are pending recovery and therefore, no amount required to be withheld as per provisions of section 54(10) of CGST Act.
4.4. The calculation of export/zero-rated turnover, adjusted aggregate turnover and Ne ITC given by the claimant has been verified and found correct.
4.5. The details of shipping bills have been verified from the ICEGATE portal and found to be correct.
4.6. The amount claimed as refund has been debited by the claimant from their electronic credit ledger.
4.7. They have also declared that M /s Hitachi Energy India Limited having GSTIN No.24AARCA9513E1ZN, has not claimed refund against relevant invoices.”
6. In view of the above findings arrived at by the respondent No.3, it is apparent the findings recorded by the Appellate Authority are contrary to the records. It is also not in dispute that the petitioner has complied with the provisions of Rule 89(2)(c) of the GST Rules.
7. In view of the foregoing reasons, the petitions are allowed. The impugned orders dated 29th September, 2023 passed in both the petitions are hereby quashed and set aside and the order dated 22nd September, 2022 passed by the respondent No.3 is hereby restored. Rule is made absolute to the aforesaid extent. No orders as to cost.