Facts of the Case:

In this case, the petitioner filed writ petition directing the tax authorities to sanction a GST refund for the period April 2020 to March 2022 based on a refund application dated 30.11.2023. The petitioner contended that although the application was filed in time, the department issued a deficiency memo only on 07.05.2024, far beyond the statutory timeline prescribed under the Central Goods and Services Tax framework.

The writ petition was disposed of by the High Court of Delhi on 28.03.2025, relying on the precedent in Jian International v. Commissioner of Delhi GST, which held that refund processing timelines under Rules 90 and 91 of the CGST/DGST Rules are mandatory. The Court ruled that if no deficiency memo is issued within 15 days, the refund application is deemed complete, and authorities cannot later delay processing by raising deficiencies. The Court accordingly directed the department to grant the refund within four weeks along with statutory interest.

Subsequently, the petitioner filed an application seeking compliance with the said order. On 13.02.2026, the Court clarified that its earlier order required no further clarification and granted liberty to the petitioner to pursue appropriate legal remedies for enforcement. Despite this, the refund remained unpaid, prompting the present contempt petition alleging wilful disobedience of judicial directions.

During the contempt proceedings, the department submitted that the matter was under active consideration and assured compliance. Recording this statement, the Court directed the authorities to complete compliance within three weeks and disposed of the petition.

Issue:

Whether failure of GST authorities to grant refund despite a judicial direction amounts to wilful disobedience warranting contempt action, and whether the Court should enforce compliance timelines.

Held that:

The High Court on examining the allegation of wilful disobedience, the Court acknowledged that continued inaction after explicit judicial directions cannot be justified. However, considering the statement made by the respondent department that the matter was under active consideration and that necessary steps were being taken to process the refund strictly in terms of the earlier orders, the Court exercised judicial restraint. Instead of proceeding with punitive contempt action at that stage, the Court deemed it appropriate to grant a final opportunity to the authorities.

The Court further noted that a subsequent application seeking compliance had already been disposed of on 13.02.2026, wherein it was clarified that the original order required no clarification and that enforcement steps could be taken in accordance with law. Despite these clear judicial directions, the refund had not been disbursed, giving rise to a legitimate grievance of non-compliance.

The Court held that its earlier judgment dated 28.03.2025 had conclusively determined the petitioner’s entitlement to refund along with statutory interest and left no scope for reinterpretation or administrative delay. The writ petition had already been disposed of with a clear and mandatory direction to the department to sanction the refund within four weeks. This direction was based on the binding precedent laid down in High Court of Delhi in Jian International v. Commissioner of Delhi GST, which interpreted Rules 90 and 91 of the CGST/DGST Rules as a complete code prescribing strict timelines for acknowledgment, scrutiny, and grant of refunds. Under the statutory scheme, failure to issue a deficiency memo within fifteen days renders the refund application deemed complete, and the department cannot subsequently delay the process by raising procedural defects.

Accordingly, the Court directed the respondents to ensure full compliance with the refund directions, including payment of statutory interest, within a period of three weeks. With this binding timeline for compliance, the contempt petition was disposed of.

Case Name: M/s. Triune Projects Private Limited Versus Mr Nikhil Kumar Commissioner of State GST And Vat, Department of Trade And Taxes, Delhi. dated 13.03.2026

To read the complete judgement 2026 Taxo.online 670