Sanctioned GST Refund Must Be Released Pending Unlisted Delayed Appeal Upon Assessee Furnishing Deposit Undertaking

Issue

Facts

• Refund Sanctioned: A refund order was passed in favor of the petitioner—a company engaged in cement manufacturing at Jharli, Haryana—in 2022.
• Non-Credit: The sanctioned refund amount was not credited to the petitioner for nearly four years.
• Belated Appeal Filed: The Revenue withheld the refund citing an appeal filed against the refund order before the Appellate Tribunal.
• Delay & Inaction: The Revenue presented its appeal before the Tribunal only in March 2026, and no hearing date had been fixed or listed.
• Writ Petition: The petitioner filed a writ petition seeking directions for the immediate release of the sanctioned refund.

Decision

• The court held that a refund allowed in 2022 cannot be indefinitely withheld based on a belatedly filed and unlisted departmental appeal.
• It was observed that the petitioner was an established cement manufacturing entity and could not be treated as a fly-by-night operator.
• The Revenue was directed to release the sanctioned refund amount to the petitioner pending appeal.
• The release was made subject to the safeguard that the petitioner furnishes an undertaking to redeposit the refund amount if the departmental appeal ultimately succeeds.

Key Takeaways

• Indefinite Withholding Prohibited: The Revenue cannot arbitrarily withhold sanctioned refund amounts based merely on the filing of an appeal, especially when the appeal is delayed and unlisted.
• Balanced Safeguards: Courts may order the release of pending refunds to established, solvent assessees by securing an undertaking to protect the Revenue’s interests in case of an adverse appellate outcome.
• Protection of Genuine Businesses: Established commercial entities with fixed operations are entitled to the timely benefit of sanctioned refunds without administrative inertia.