GST UPDATE

Question before Hon’ble Court:

What should be the date of communication of the order when the physical copy of the order was communicated to the authorized representative but the summary order in Form-APL-04 was uploaded later?

Whether refund can be denied solely on the ground of limitation when the demand has already been set aside by the Appellate Authority and an express direction for refund has been issued, particularly where the summary in FORM GST APL-04 was uploaded on the GST portal belatedly by the department?

Hon’ble Court:	HIGH COURT OF GUJARAT AT AHMEDABAD
Case Title	PANILA CHEM LIMITED & ANR. Versus STATE OF GUJARAT & ORS
Appeal No. & Citation	SPECIAL CIVIL APPLICATION NO.4610 of 2025
Date of Order	23 October 2026
Outcome	Appeal

Brief Facts of the Case

The petitioner company purchased goods from a party which were dispatched to Bhavnagar against a valid e-way bill. During the transportation of the goods, the vehicle was intercepted by the State Tax Officer, Mobile Squad, on the allegation that the e-way bill had been rejected. Consequently, proceedings under Section 129 of the CGST Act were initiated, culminating in the issuance of an order in FORM GST MOV-09, whereby tax and penalty were imposed. The petitioners deposited the disputed amount to secure the release of the vehicle along with the goods. Aggrieved by the said order, the petitioners preferred an appeal before the Deputy Commissioner of State Tax (Appeals). The appellate authority allowed the appeal and set aside the demand and accordingly the State Tax Officer was directed to refund the amount deposited by the petitioners, subject to verification of their tax liability.
A physical copy of the appellate order was handed over to the authorised representative of the petitioners. However, the summary of the appellate order in FORM GST APL-04 was uploaded on the GST portal much later. Immediately after the uploading of FORM GST APL-04, the petitioners filed an application for refund in FORM GST RFD-01. However, the refund application was rejected by the Assistant Commissioner of State Tax on the ground that it had been filed beyond the prescribed period of limitation under Section 54(1) which was also upheld by the appellate authority, holding that the appellate order had been communicated to the petitioners on the date on which its physical copy was handed over to their authorised representative and, therefore, the refund application was time-barred. Aggrieved by the rejection of their refund claim, the petitioners approached the Gujarat High Court.

Brief Arguments by Petitioner

Retention of Amount After Setting Aside the Demand Is Without Authority of Law

It was submitted that Article 265 of the Constitution of India mandates that no tax shall be levied or collected except by authority of law. In the present case, the Appellate Authority had set aside the demand and also expressly directed the State Tax Officer to refund the amount deposited by the petitioners. Once the demand had been set aside and a specific direction for refund had been issued, the respondent authorities were duty-bound to refund the amount, even in the absence of a separate application by the petitioners. The continued retention of the amount was violative of Article 265 of the Constitution of India.

Relevant Date for Refund Under Section 54(1) of the CGST Act

Without prejudice to the aforesaid submissions, it was contended that Section 54(1) of the CGST Act permits a refund application to be filed within the prescribed period of limitation. It was submitted that the summary in FORM GST APL-04 as contemplated under Section 107(11) of the CGST Act was communicated through the GST portal only on the date of uploading of the said summary. Accordingly, the limitation period for filing the refund application commenced from the date of uploading FORM GST APL-04, and the refund application filed immediately thereafter was well within the prescribed period of limitation.

Communication of the Appellate Order Was Complete Only Upon Issuance of FORM GST APL-04

The petitioners contended that communication of the appellate order could be regarded as complete only upon issuance of its summary in FORM GST APL-04. Reliance was placed upon Circular No. 125/44/2019-GST dated 18.11.2019 issued by the CBIC. It was, therefore, contended that, even having regard to Section 169(1)(d) of the CGST Act, the appellate order could be treated as having been communicated only when the summary was uploaded on the GST portal. Having failed to upload the summary at the relevant time, the authorities could not subsequently disregard the date of its communication Consequently, the refund application deserved to be treated as having been filed within the statutory period of limitation.

Entitlement to Interest on Delayed Refund

The petitioners also claimed entitlement to interest at the higher statutory rate by placing reliance upon the judgment of the Gujarat High Court in COMSOL Energy Pvt. Ltd. v. State of Gujarat, reported in 2021 (55) GSTL 390.

Brief Arguments by Respondent

Relevant Date Is the Date of Physical Communication of the Appellate Order

It was submitted that the relevant date for determining the limitation period is governed by Section 54 of the CGST Act, particularly Explanation (2)(d) thereof. The said provision stipulates that where tax becomes refundable as a consequence of a judgment, decree, order or direction of the Appellate Authority, Appellate Tribunal or any court, the relevant date shall be the date of communication of such judgment, decree, order or direction. In the present case, the appellate order was communicated to the authorised representative of the petitioners by handing over its physical copy. Accordingly, the relevant date was the date of such physical communication. Therefore, the subsequent uploading of the summary of the appellate order in FORM GST APL-04 would not alter the date on which the original appellate order was communicated to the petitioners.

FORM GST APL-04 Is Merely a Summary of the Appellate Order

It was contended that FORM GST APL-04 is merely a summary of the appellate order and the summary is intended only to facilitate procedural compliance and cannot determine or extend the statutory period of limitation prescribed under Section 54 of the CGST Act. Further, FORM GST RFD-01 provides separate options for filing a refund application on the basis of an order received offline or online. Where an order is received offline, the applicant is required to select the offline option, the petitioner could have filed the refund application by selecting the offline option available on the portal.

No interdependence between FORM GST APL-04 and the filing of a refund application

It was further submitted that there was no interdependence between FORM GST APL-04 and the filing of a refund application in FORM GST RFD-01. Even in the absence of uploading FORM GST APL-04, the petitioners could have filed the refund application by selecting the offline option, entering the order number mentioned in the appellate order and attaching a copy of the order along with the other requisite documents.

Subsequent Uploading Was only Pursuant to Administrative Instructions issued for orders passed mannualy

It was submitted that the proceedings in the present case had been conducted manually and that the final appellate order had likewise been served manually. The summary in FORM GST APL-04 was subsequently uploaded on the GST portal pursuant to administrative directions issued by the Additional Commissioner (Appeals), requiring appellate orders to be uploaded on the portal and discontinuing the practice of passing orders manually.

Refund Application Was Barred by Limitation

FORM GST APL-04 being merely a summary of the appellate order, the limitation period was correctly computed from the date of communication of the original appellate order. Accordingly, the rejection of the refund application by the competent authority and the subsequent dismissal of the appeal were justified and did not warrant interference by the High Court.

Findings and Judgement

Relevant Date Under Section 54(1) of the CGST Act

The Court first examined Section 54(1) of the CGST Act, and examined Explanation (2)(d) to Section 54, and held that, under the aforesaid provision, the relevant date is the date on which the judgment, decree, order or direction of the competent authority, tribunal or court is communicated. In the present case, it was not disputed by the petitioners that the appellate order had been physically communicated to their authorised representative. Accordingly, the date of physical communication of the appellate order would ordinarily constitute the relevant date for the purposes of Explanation (2)(d) to Section 54 of the CGST Act.
B. FORM GST APL-04 Is Merely a Summary of the Appellate Order
The Court examined Rule 113 of the CGST Rules, which provides for issuance of a summary of the appellate order in FORM GST APL-04, clearly indicating the final amount of demand confirmed.
On a plain reading of Rule 113, the Court observed that FORM GST APL-04 contains a summary of the appellate order. In the present case, the document uploaded on the portal was merely the summary of the original appellate order, a physical copy of which had already been handed over to the authorised representative of the petitioners.
The Court, therefore, did not accept the contention of the petitioners that the appellate order could be treated as communicated only upon uploading of FORM GST APL-04.

Refund Application Could Be Filed Without Waiting for FORM GST APL-04

The Court held that the document uploaded on the portal FORM GST APL-04was merely the summary of the original appellate order, a physical copy of which had already been handed over to the authorised representative of the petitioners. On further perusal of FORM GST RFD-01 indicated that the applicant is required to specify the grounds for claiming refund. The form specifically provides for claiming refund on account of an order, including an appellate order, and also provides for selecting any other specified ground for claiming refund. Significantly, neither Rule 89 nor FORM GST RFD-01 stipulates that a taxpayer must await the uploading of the summary of an appellate order in FORM GST APL-04 before filing a refund application. Thus, the Court rejected the petitioners' interpretation that uploading of FORM GST APL-04 was a necessary prerequisite for filing the refund application.

Consequently, the refund application was required to be filed within the prescribed period of limitation computed from the date of such communication of the physical copy of the order. However, the Court observed that the issue which nevertheless arose for consideration was whether, in the peculiar facts and circumstances of the case, the petitioners should be denied the refund directed by the Appellate Authority solely on the ground that the refund application had been filed beyond the prescribed period of limitation.

Refund Cannot Be Denied Merely on Account of Procedural Delay When the Appellate Authority Has Expressly Directed Refund

The Court observed that once the Appellate Authority had set aside the demand and directed the refund of the amount deposited by the petitioners, the continued retention of the amount by the department, subject to the applicable statutory procedure, raised a serious question of legality. The Court referred to Article 300A of the Constitution of India, which provides that no person shall be deprived of his property save by authority of law. It observed that the amount of refund qualifies as property and is constitutionally protected.
The Court further referred to Article 265 of the Constitution of India, which mandates that no tax shall be levied or collected except by authority of law. It also observed that denial of refund would affect the petitioners' fundamental right guaranteed under Article 19(1)(g) of the Constitution of India. In the present case, the demand of tax and penalty pursuant to which the amount had been deposited was set aside by the Appellate Authority, which expressly directed refund of the amount. The continued retention of the amount required consideration in the light of the aforesaid constitutional safeguards.

Procedural lapses Should Not Defeat Substantive Rights

In this regard, the Court placed reliance upon the judgment of the Supreme Court in Sambhaji v. Gangabai, reported in (2008) 17 SCC 117, wherein the Supreme Court observed that the “procedural law is not to be a tyrant but a servant, not an obstruction but an aid to justice. A Procedural prescription is the handmaid and not the mistress, a lubricant, not a resistant in the administration of justice." Considering these peculiar circumstances, the Court held that the petitioners' claim should not be defeated solely on account of the delay in uploading the summary of the appellate order.

Date of Uploading FORM GST APL-04 Treated as Relevant Date in the Peculiar Facts of the Case

The Court carved out an exception having regard to the peculiar facts and circumstances of the case. The Court held that the date of uploading FORM GST APL-04 on the GST portal may be treated as the relevant date for the limited purpose of considering the petitioners' refund application. Accordingly, the refund application filed immediately thereafter was held to be within the prescribed period of limitation. The Court further observed that the use of the expression "may" in Section 54(1) must be interpreted in the context of the provision as a whole and cannot, by itself, be construed as rendering the prescribed limitation period optional. However, such rigid interpretation cannot be used or invoked for validating an illegal action.

State Has a Constitutional Obligation to Act Fairly and Ensure Implementation of Appellate Orders

The Court further that retention of the amount ordered to be refunded would indirectly amount to reviving the original demand, which had already been set aside by the Appellate Authority. Therefore, the statutory provisions cannot be permitted to operate in a manner that would result in the revival of an illegal action. In the present case, although the physical copy of the appellate order had been handed over to the authorised representative earlier, the summary of the order was uploaded on the GST portal only subsequently, following departmental instructions. In view of these peculiar circumstances, the Court held that the date of uploading FORM GST APL-04 would be treated as the relevant date for considering the petitioners' refund application. Consequently, the petitioners were held entitled to the refund in accordance with the appellate order and subject to the applicable law governing consequential interest.

Entitlement to Interest on Delayed Refund Under Section 56 of the CGST Act

The Court observed that the first part of Section 56 provides for interest at the rate of six per cent where the amount ordered to be refunded under Section 54(5) is not refunded within the prescribed period of sixty days from the date of receipt of the refund application. The proviso to Section 56 deals with a situation where the refund arises pursuant to an order passed by an adjudicating authority, Appellate Authority, Appellate Tribunal or court, which has attained finality. In such circumstances, where the refund is not granted within sixty days from the date of receipt of the application filed consequent to such order, interest at a rate not exceeding nine per cent is payable. The Court observed that the proviso also contemplates the filing of an application consequent to the appellate or judicial order. Thus, where an application for refund is made within the prescribed period of limitation and the amount is not refunded within sixty days from the receipt of such application, the taxpayer becomes entitled to interest. However, the Court specifically observed that since the petitioners were required to file the refund application upon receipt of the physical copy of the appellate order and had failed to do so, they would not be entitled to interest from the date of the appellate order.
Accordingly, in order to balance the equities, the Court directed that the petitioners would be entitled to interest at the rate of six per cent on the refund amount from the date specified by the Court until actual payment. The Court further directed that if the respondents failed to implement the directions within the stipulated period, the petitioners would become entitled to interest at the rate of nine per cent per annum thereafter.

CA Pradeep Jain_

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GST update /2026-27/0114

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