Ma Agro Proprietor Mr Ashfak Jafar Shekhani vs. Dy Commissioner Of State Tax Sanpada 501

Held

The Court held that the Respondent cannot refuse to comply with the Appellate Authority's order dated 21 August 2025 as long as it has not been set aside or stayed. The Court found merit in the Petitioner's submission that the Respondent's delay in granting the refund, based on the contemplation of an appeal, was unacceptable and contrary to the rule of law. Citing the Delhi High Court's decision in Mr. Brij Mohan Mangla vs. Union of India & Ors., the Court emphasized that withholding implementation of an appellate order merely because an appeal is contemplated is debilitating. Accordingly, the Court allowed the writ petition. The first Respondent was directed to refund the amount of Rs. 7,27,83,010/- to the Petitioner within 10 days of the order's uploading. If the refund was not processed within this period, the Respondent would be liable to pay additional interest at 6% per annum, with the responsibility to recover this additional amount from the responsible officer(s) rather than the State/Central Exchequer.

Facts

The Petitioner, Ma Agro Proprietor Mr Ashfak Jafar Shekhani, approached the Bombay High Court via a writ petition. The Petitioner sought compliance with an order dated 21 August 2025 passed by the Appellate Authority, which directed the first Respondent, the Dy Commissioner of State Tax, Sanpada, to refund an amount of Rs. 7,27,83,010/- along with interest under Section 56 of the CGST Act. The Petitioner alleged that the Respondent was delaying the refund, citing the contemplation of an appeal against the Appellate Authority's decision as the reason. The Court had previously heard the matter on 25 November 2025 and granted time to the Respondent to obtain instructions.

Key Issues

1. Whether the Respondent can delay the grant of a refund, as directed by the Appellate Authority, on the sole ground that an appeal against the Appellate Authority's order is contemplated? (Question of law, turning on principles of administrative law and the enforceability of appellate orders). Petitioner's arguments: The Petitioner contended that the Respondent cannot withhold the refund based on the mere contemplation of an appeal. They relied on the Delhi High Court's decision in Mr. Brij Mohan Mangla vs. Union of India & Ors., which held that refunds cannot be delayed on the ground that appeals are in contemplation, emphasizing that such delays are debilitating to the rule of law. The Petitioner argued that as long as the Appellate Authority's order remains in effect and is not stayed or set aside, the Respondent is bound to comply with it. Respondent's arguments: The Respondent, through the Additional Government Pleader, sought time to obtain instructions. No specific arguments were recorded in the judgment regarding the Respondent's legal stance on delaying the refund.