Delhi HC Dismisses IGST Refund Plea by Risky Exporter; Cancels Claim over Concealed GST Registration Cancellation
Delhi HC Dismisses IGST Refund Plea by Risky Exporter; Cancels Claim over Concealed GST Registration Cancellation
Recently, a company tried claiming a GST refund for its exports, even though its GST registration was earlier cancelled. It did not tell the court about this and did not even appear for any hearings, nor did it even reply to the government. As a result, the court dismissed the appeal and imposed a penalty on the firm, saying no refund can be given until the GST registration is restored.
The current writ petition is being filed by a company named Shree Radhe Vallabh Traders (Petitioner) against the Commissioner of Central Goods and Services Tax, Delhi East Commissionerate, New Delhi (Respondent), in the Delhi High Court, seeking the release of an IGST refund of Rs. 1,19,29,742, along with interest. The case was decided on July 24, 2025, via hybrid mode.
Since 2019, the company has had a valid GST number and Import Export Code (IEC). They claimed to have exported goods from countries such as the UAE and Uganda and filed shipping bills, which they believed made them eligible for an IGST refund.
On February 06, 2020, the Superintendent, CGST Audit-1 Commissionerate, Delhi issued a letter to the company, pointing they as a “risky exporter.” Meaning, the authorities found something was not right with their transactions. The company filed a reply to the letter in May 2020, submitted all relevant documents, and also requested the refund. However, their request was not accepted, so they again filed an appeal (W.P.(C) 6388/2020) in 2020. In which the government claimed that the incorrect jurisdictional Commissionerate has been approached. Hence, on May 05, 2023, the writ petition was withdrawn by the company with permission to file a new one with the correct departments as parties.
Then, the company re-filed a second writ petition (W.P.(C) 6768/2023-current one) raising the same demand to release the GST refund with interest. However, the court discovered some major issues with the appeal: the GST registration of the company was earlier cancelled on February 27, 2023, and this cancellation was done retrospectively from July 13, 2018. The cancellation was based on a Show Cause Notice (SCN) issued on October 11, 2022, but the Petitioner did not reply to it or attend any personal hearing. This fact was not discussed by the company in the current writ petition. The court considered this a serious offence, as hiding material facts in a legal case is unethical and misleading. A personal hearing for the refund application was scheduled for July 22, 2025; however, the company also did not appear for it. Additionally, in earlier proceedings, the authorities had done a physical verification of the company’s premises. The court discovered the company to be non-existent and said that it did not appear to be a bona fide business. This led to the placing of an “alert” on the company’s IEC code in October 2019, meaning any IGST refunds were to be suspended.
The court was shocked that the company never disclosed that its GST registration was cancelled, and also did not appear for scheduled hearings. Since GST registration is cancelled, the Court stated clearly, “No refund can be given unless GST registration is restored.” The judges believed that the petitioner had concealed important information and acted in bad faith.
In its final order, the high court dismissed the appeal, saying no refund can be given until the GST registration is restored, and imposed a penalty of Rs. 25,000 on the company. This amount must be paid to the Delhi High Court Bar Association. The company is allowed to apply for restoration of its GST registration, and only then can it pursue the refund. A follow-up date is fixed as August 28, 2025, to check whether the company has paid the Rs. 25,000 amount.