Interim Stay Granted as Revisional Order Appears Passed Beyond

Interim Stay Granted as Revisional Order Appears Passed Beyond the Three-Year Statutory Limitation Period

Issue

Whether a final GST revisional order under Section 108 is legally sustainable if it is passed after the expiry of the three-year statutory limitation window from the date of the original refund order, even if the preceding Show Cause Notice (SCN) was issued within that three-year timeframe.
Whether procedural delays caused by a taxpayer’s adjournment requests can be legally excluded to extend the strict statutory limitation period prescribed for a revisional authority to pass a final order.

Facts

The petitioner-taxpayer was granted a tax refund by the department via Form GST RFD-06 on May 5, 2022.
The Revisional Authority subsequently initiated proceedings by issuing an SCN on March 26, 2025, alleging that the petitioner had received an excess and inadmissible refund.
The final revisional order confirming the recovery of the refund was passed by the authority on December 5, 2025.
The petitioner approached the High Court seeking a restraint order against recovery actions, arguing that the final order was time-barred because it was issued more than three years after the original refund date.
The petitioner further contended that merely issuing the SCN within the three-year window does not dynamically extend or save the limitation period required for passing the final order.
The Revenue department opposed the plea, arguing that delays caused by the petitioner’s own adjournment requests should be deducted when calculating the statutory limitation period.

Decision

Held, yes: The respondent revenue authorities are granted a period of six weeks to file their formal counter-affidavit, and the petitioner is permitted four weeks thereafter to file a rejoinder.
Held, yes: To protect the taxpayer pending a final hearing, the court granted an interim stay prohibiting the department from executing any coercive recovery actions against the petitioner.
Held, yes: The interim relief is explicitly justified because the statutory mandate under Section 108(2)(b) outlines a strict limitation timeline that prima facie appears to have been breached by the final order’s date.

Key Takeaways

Strict Order Deadlines: Section 108(2)(b) establishes a hard temporal cap for revision proceedings. The ultimate focus of the limitation law is the actual date on which the final revisional order is passed, not merely the date when the initial show-cause notice was dispatched.
Interim Protection Against Overreach: When a prima facie look at the record indicates that a tax authority has acted outside its permitted statutory timeframe, courts will actively step in to block aggressive or coercive asset recovery until the jurisdictional timeline dispute is fully resolved.

HIGH COURT OF DELHI

Interglobe Aviation Ltd.

Additional Commissioner CGST South Commissionerate^*

NITIN WASUDEO SAMBRE and Ajay Digpaul, JJ.

W.P. (C) No. 6405 of 2026
CM APPL. Nos. 31633 & 31634 of 2026

MAY 12, 2026

V. Lakshmikumaran, Yogendra Aldak, Kunal Kapoor and Yatharth Tripathi, Advs. for the Petitioner. Ms. Monica Benjamin, Senior Standing Counsel for the Respondent.

ORDER

1. An order of refund came to be passed vide FORM-RFD-06 on 5^th May, 2022 [Annexure-7].

2. The said order was followed with a Show Cause Notice to the petitioner in view of the provisions of Section 108 of the Central Goods and Services Act, 2017 (hereinafter referred to as ‘CGST Act’) in the matter of exercise of revisional powers.

3. The impugned notice dated 26^th March, 2025, is based on the excess inadmissible refund made to the petitioner.

4. The Authority proceeded to pass the impugned order in exercise of the revisional powers on 5^th December, 2025, which is impugned in the present petition.

5. Amongst other, the contentions raised by the learned counsel appearing for the petitioner are that the statutory mandate under clause (b) of Sub-Section (2) of Section 108 of the CGST Act, is worded in a negative way, so as to infer that even if Show Cause Notice is issued within a period of three years from the date of passing of the initial order, no order could have been passed once the statutory period of three years has expired thereunder.

6. He would claim that the issue is squarely covered by the Division Bench Judgment of the Andhra Pradesh High Court in the matter of Sneha Constructions v. Joint Commissioner [APHC:0104:3103:2025].

7. The further contentions are that the Revisional Authority has proceeded to exercise powers under Section 74 of the CGST Act, so as to impose a penalty on the petitioner, particularly, when the said Section provides for the determination of tax which was erroneously refunded and does not speak of penalty which can be imposed, particularly, when there is no whisper of it in the Show Cause Notice. His further contentions are that the Revisional Authority has travelled beyond the scope of the Show Cause Notice and also passed an order in contravention to schemes of Section 74 of the CGST Act.

8. It is urged that in the aforesaid background, not only the order is illegal, but the respondent is required to be restrained from carrying out recovery proceedings against the petitioner.

9. While countering at this stage, learned counsel for respondent states that an appropriate counter shall be submitted within a period of four weeks from today, however, she would urge that the Court may not grant interim relief against the recovery proceedings, particularly, when the petitioner himself is responsible for the delay qua the statutory period prescribed under Section 108(2)(b) of the CGST Act. According to her, once such period is excluded, i.e., for which the petitioner has sought adjournment and delayed the proceedings before the Revisional Authority, the order has to be inferred within the statutory period.

10. She seeks further time to prepare and address.

11. That being so, issue notice to the respondent.

12. Ms. Monica Benjamin, learned Senior Standing Counsel waives notice for the respondent.

13. We permit the respondent to place the counter affidavit on record within a period of six weeks from today.

14. Rejoinder, if any, be placed on record within a period of four weeks thereafter.

15. In the meantime, there shall be no coercive action in the light of the statutory mandate provided under Section 108(2)(b) of the CGST Act, particularly, prescribing the limitation.

16. List on 8^th September, 2026.