Appellate order denying GST refund quashed and remanded

Appellate order denying GST refund quashed and remanded due to lack of reasoned, speaking findings.

Issue

Whether a GST appellate order sustaining the rejection of a zero-rated service export refund claim of approximately ₹3.42 crores is legally sustainable if it merely reproduces agreement clauses without recording specific, reasoned, and speaking findings on the merits of the case.

Facts

The Business & Export: The petitioner, a registered Limited Liability Partnership (LLP), exported operational, finance, and risk support services to Apollo Management Holdings L.P., USA, treating it as a zero-rated supply.
The Refund Claim: The petitioner filed a refund application for about ₹3.42 crores, backed by supporting documentation. The Assessing Officer initially sanctioned 90% of this amount on a provisional basis.
The Show Cause Notice: The Assessing Officer later issued a Show Cause Notice (SCN) alleging a non-submission of documents and non-fulfillment of the specific export-of-service conditions, demanding a reply and scheduling a hearing.
Adjudication Rejection: The petitioner requested additional time to reply, but the adjudicating authority summarily rejected the remaining refund claim solely on the grounds of non-filing of the reply and non-furnishing of documents.
Appellate Dismissal: On appeal, the appellate authority conducted hearings and accepted written submissions from the petitioner. However, the authority ultimately dismissed the appeal and sustained the refund rejection, leading to the writ petition.

Decision

Absence of Specific Findings: The High Court observed that the impugned appellate order recorded no specific or analytical findings regarding the legitimacy of the refund claim on its merits.
Mere Reproduction of Clauses: Instead of evaluating the evidence, the appellate authority merely reproduced the contractual clauses of the agreement executed with the US entity.
Non-Speaking Order Vitiated: It was held that tax authorities are legally required to pass a reasoned and speaking order prior to rejecting a claim. Consequently, the impugned order suffered fundamentally from the vice of being a non-speaking order.
Remand for De Novo Review: Following consistent views taken in earlier judicial orders, the High Court quashed the impugned appellate order dated October 11, 2024, and remanded the proceedings back to the original authority for a fresh (de novo) consideration after granting the petitioner a proper opportunity to be heard.

Key Takeaways

Speaking Orders Are Mandatory: Principles of natural justice demand that administrative and quasi-judicial orders must contain clear reasons. Summarily rejecting a claim or simply copying agreement text without active analysis makes an order legally void.
Remand Over Absolute Rejection: When lower tax authorities fail to apply their minds or evaluate evidence submitted during an appeal, higher courts will routinely quash the defective orders and send the matter back for a fresh factual review.
Due Process in Tax Administration: Even if an assessee requests an adjournment or delays a reply at the initial stage, an appellate authority cannot rubber-stamp a rejection if the complete documentation is subsequently placed before it during the appeal hearings.

HIGH COURT OF BOMBAY

Apollo India Services LLP

State of Maharashtra^*

G. S. KULKARNI and Aarti Sathe, JJ.

WRIT PETITION NO. 5268 OF 2024, 467 OF 2026, 4423 OF 2025

APRIL 29, 2026

Rohan Shah, Sr. Adv., Prithviraj Choudhari, Mohammad Anajwala, Ms. Diva Devarsha, Ms. Kausarjahan Sayed and Aansh Desai for the Petitioner. Amar Mishra, AGP and Ms. Jyoti Chavan, Addl. Govt Pleader for the Respondent.

ORDER

1. These three petitions involve common issues of law and facts except for the dates of the impugned orders and the amounts of refund and therefore can be conveniently disposed of by this common order. For the sake of convenience, the facts and prayers in respect of Writ Petition No.5268 of 2024 being the lead petition are reproduced below.

2. The prayers in the Writ Petition No.5268 of 2024 praying for the following substantive reliefs are as under :

“(a) this Hon’ble Court be pleased to issue a writ of certiorari or a writ in the nature of certiorari or any other appropriate writ, order or direction for calling for the records of the present case and after going through the legality and validity thereof be pleased to quash and set aside the Impugned Order dated 11.10.2024 passed by the Respondent NO.4 (Exhibit J hereto).”

3. The facts lie in a narrow compass. The Petitioner is limited liability partnership firm and is primarily stated to be engaged in exporting operational support service (trade accounting, data reconciliation), finance support service (back office processing, accounting, book keeping, MIS related activities), risk support service (assistance in operational risk management and monitoring of compliance with the internal risk policies, to Apollo Management Holdings, L.P, a Delaware limited partnership registered in United States of America (AMHUS) located outside India. The Petitioner is registered with the Goods and Service Tax Department bearing GSTIN No.27ABMFA8496R2Z6 and the certificates of incorporation of both the Petitioner and the service recipient AMHUS being incorporated as separate legal entities under the respective laws is issued. The Petitioner exports services outside India on payment of Goods and Service Tax (GST) and then claims refund of the GST paid on invoices issued with payment of tax, in terms of Section 54 of the Central Goods and Services Tax Act, 2017 (CGST Act) and Maharashtra Goods and Services Tax Act, 2017 (MGST Act) read with Section 16 of the Integrated Goods and Services Tax Act, 2017 (IGST Act).

4. The Petitioner on 9^th June 2023 filed an application for refund of GST on account of export of services for the period September-2022 to the tune of Rs.3.42 crores. The said application was acknowledged vide Form RFD-02 on 26^th June 2023. The Petitioner also furnished a complete set of physical documents on 7^th July 2023 which included copy of export invoice with the FIRC copy, copy of service agreement entered into with AMHUS, sample copy of inward invoices, copy of Form GSTR 1 and GSTR 3B filed for the relevant period, copies of all the declarations and undertakings and copy of Form GSTR 2B evidencing the input invoices utilized towards payment of IGST amount. On 10^th July 2023 in terms of the provisions of Section 54 of the CGST/MGST Act, provisional refund of 90% refund amount was sanctioned by Respondent no.3 vide provisional refund order in Form RFD-04, of even date. The payment order also was issued in Form RFD-05 and 90% provisional refund amount was credited to the account of the Petitioner.

5. On 25^th August 2023 Respondent no.3 issued a show cause notice to the Petitioner asking the Petitioner to show cause as to why the refund claim should not be rejected for non-submission of certain documents and nonfulfillment of conditions prescribed in Section 2(6) of IGST Act. The show cause notice also directed the Petitioner to file reply and appear on 11 ^th September 2023 for a personal hearing. The Petitioner by letter dated 11^th September 2023 addressed to Respondent no.3 requested for additional time to furnish the information as sought for by the show cause notice dated 25 ^th August 2023. Respondent no.3, however, without acceding to the request made by the Petitioner to grant them further time to submit additional information, proceeded to pass an order dated 14^th September 2023 and rejected the Petitioner’s refund claims solely on the ground of non-filing of reply and not furnishing the required documents.

6. Being aggrieved by the aforesaid order passed by Respondent no.3, the Petitioner preferred an appeal before Respondent no.4 on 8^th November 2023 and Respondent no.4 conducted multiple hearings on 13^th December 2023, 25^th January 2024, 26^th May 2024, and 5^th August 2024 on the appeal filed before Respondent no.4. It is the Petitioner’s contention that during the personal hearing held on 5^th August 2024, Respondent no.4 directed the Petitioner to submit suitable explanation and proof evidencing that the Petitioner and AMHUS were not merely establishments of distinct persons. In response to the aforesaid, the Petitioner requested for time to submit the aforesaid details and thereafter by its letter dated 28^th August 2024 made its submissions in that regard complying with the issues as raised by Respondent no.4 submitted at the time of personal hearing held on 5^th August 2024.

7. Respondent no.4 proceeded to dismiss the appeal filed by the Petitioner vide order dated 11^th October 2024 (impugned order) and sought to reject the refunds as claimed by the Petitioner The Petitioner contends that the impugned order rejecting the refunds was passed on the premise that liaison activity performed by the Petitioner was a service to itself and the service recipient i.e. AMHUS could not be treated as a separate person and hence the nature of services rendered by the Petitioner to AMHUS would not fall within the purview of supply under the GST Act. On the basis of the aforesaid finding, Respondent no.4 rejected the refund as claimed by the Petitioner and upheld the order dated 14^th September 2023 passed by the adjudicating authority.

8. It is in the backdrop of the above facts that the Petitioner being aggrieved by the impugned order passed by Respondent no.4 has filed present petition.

9. We have heard Mr.Rohan Shah, Senior Advocate, with Mr.Prithviraj Choudhari, Mr.Mohammad Anajwala, Ms.Diva Devarsha, Ms.Kausarjahan Sayed, Mr.Aansh Desai for Petitioner, Ms.Jyoti Chavan, Additional Govt.Pleader, and Mr.Amar Mishra, AGP, for State. We have perused the papers and proceedings with the assistance of learned counsel for the parties. It is Mr.Shah’s submission that the impugned order is passed without dealing with/adverting to the submissions made by the Petitioner wherein the Petitioner had categorically raised the plea that the Petitioner and the service recipient are distinct persons and not merely establishments of distinct persons. The Petitioner, therefore, submitted that they had rightfully claimed the refund of ITC and the same amounted to export of services, which gave rise to the refund as claimed by the Petitioner. Mr.Shah further submitted that before passing the impugned order, Respondent no.4 had not considered the submissions made by the Petitioner by way of their reply dated 28^th August 2024 and therefore the impugned order was passed in contravention of principles of natural justice, inasmuch as it did not consider the crucial aspect of the Petitioner and service recipient AMHUS being distinct and separate person. He further submitted that Respondent no.4 in the impugned order for the very first time held that the Petitioner undertakes liaison services and hence is an intermediary, and this was never put to the Petitioner to offer a chance to the Petitioner to meet the aforesaid finding rendered by Respondent no.4. It was, therefore, submitted that the impugned order was passed without giving a proper hearing or without adverting to the submissions made by the Petitioner. He therefore, submitted that since the impugned order was passed on a nonapplication of mind, was not a reasoned order and had only relied on certain clauses of the agreement entered into between the Petitioner and AMHUS without rendering a finding in respect thereof, the consequent rejection of refund as claimed by the Petitioner is also bad in law and a fresh hearing is required to be offered to the Petitioner wherein the Petitioner’s refund claims should be adjudicated.

10. It is further submitted that this Court in a series of decisions which were based on similar facts and circumstances and where impugned orders were passed without considering the submissions made by the assessee, has remanded the matter back to the Appellate Authority for de novo consideration, referring particularly to the decision rendered by a co-ordinate Bench of this Court in case of Sundyne Pumps and Compressors India (P.) Ltd. v. Union of India (Bombay)/2025-SCC OnLine-Bom-2372. Mr.Shah also sought to place reliance on the following decisions :

Lubrizol Advance Materials India (P.) Ltd. v. Union of India 108 GSTL 278 (Bombay)/(Writ Petition No.987 of 2026 );

II.

Vistex Asia Pacific (P.) Ltd. v. Union of India 106 GSTL 279 (Bombay)/(Writ Petition No.4852 of 2022 );

III.

V Ships india (P.) Ltd. v. Union of India (Bombay)/(Writ Petition No.1534 of 2025 );

IV.

Magna Automotive India (P.) Ltd. v. Union of India [Writ Petition No. 6501 of 2024].

11. Per contra, Ms.Chavan, learned AGP on behalf of the State fairly submitted that the proceedings could be remanded back to the adjudicating authority to pass a well reasoned and speaking order and therefore the plea as made by the Petitioner could be accepted.

12. Having heard the learned counsel for the parties and considering that a consistent view has been taken by this Court in the orders referred to by the learned counsel for the Petitioner, as enumerated above, we find substance in the contention as urged on behalf of the Petitioner. We find that no specific finding has been recorded in the impugned order before rejecting the refund application, as claimed by the Petitioner, and therefore a reasoned and speaking order is required to be passed by Respondent No.4 prior to the rejection of refund. The impugned order, therefore, suffers from the vice of being a non-speaking order vis-a-vis rejection of the refund claim of the Petitioner. We also note that the impugned order has not rendered any finding in respect of refund claims made by the Petitioner and has only reproduced the clauses of the agreement entered between the Petitioner and the AMHUS and therefore the impugned order is a bald and non speaking order.

13. In light of the aforesaid discussion, we are inclined to pass the following order which will meet the ends of justice.

ORDER

(i)

The impugned order dated 11^th October 2024 is quashed and set aside;

(ii)

The proceedings stand remanded to the Adjudicating Authority/Original Authority for de novo consideration to consider the refund claim of the Petitioner and for a fresh order to be passed in accordance with law, after an opportunity of being heard is granted to the Petitioner;

(iii)

The Adjudicating Authority/Original Authority shall complete the determination within a period of three months from the date of this order;

(iv)

All contentions of the parties are expressly kept open;

(v)

Writ Petition No.5268 of 2024 stands disposed of in the aforesaid terms. No costs.

14. In view of the order passed in Writ Petition No.5268 of 2024, Writ Petition Nos.467 of 2026 and 4423 of 2025 are also disposed of in the aforesaid terms.