Mihika Pharmaceuticals vs The State Of Maharashtra

CNR No : HCBM020301082026

WP-4310-2026.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO. 4310 OF 2026
Mihika Pharmaceuticals
having its registered office at 506,
Parmeshwar Center 18, Dalmiya Estate,
Mulund West, Mumbai-4000080
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Versus
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Mr. Yash Dethe a/w Mr. Rahul Thakar and Mr. C. B. Thakar i/b C. B.
Thakar, for the Petitioner.
1. The State of Maharashtra
Through Government Pleader,
Bombay High Court.
2. The Commissioner of State Tax,
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8 Floor, GST Bhavan,
Mazgaon, Mumbai-400010.
3. The Assistant Commissioner of State Tax
(MUM-NOD-D-1303)
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Cabin No.G-4, 5 Floor,
Suburban GST Bhavan, Bandra (East),
Mumbai-400051.
Smt. Jyoti Chavan, Addl. G. P. a/w Mr. Himanshu Takke, A.G.P, for
the Respondent-State.
..…
CORAM : M. S. KARNIK &
SANDESH D. PATIL, JJ.
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DATE : 3 NOVEMBER 2026
JUDGMENT [PER SANDESH D. PATIL, J.] :-
1. By the present Writ Petition, the Petitioner is challenging the
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Refund Rejection Order dated 14 July, 2026 in Form GST RFD-06
Manisha
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Digitally signed
by MANISHA
BALKRISHNA
TALEKAR
Date: 2026.11.05
12:41:16 +0530
MANISHA
BALKRISHNA
TALEKAR
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WP-4310-2026.doc
passed by the Respondent No.3 which is at Exhibit-G to this Petition,
whereby the Petitioner’s legitimate claim of Rs.19,61,750/- arising
from excess pre-deposit paid during the Appeal proceedings, is
rejected.
2. The learned Counsel for the Petitioner submitted that the
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the Respondent No.3 on 31 December, 2024 passed an Adjudication
Order in Form GST DRC-07 for FY 2020-21 raising a demand of
Rs.3,66,03,378/-. Being aggrieved with the same, the Petitioner
preferred Appeal under Section 107 of the Maharashtra Goods and
Services Tax Act, 2017 (MGST) and deposited Rs.19,64,722/- as pre-
deposit. Thereafter, the First Appellate Authority-Respondent No.2
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passed the Order-in-Appeal on 10 March, 2026 in Form GST APL-
04, reducing the total demand to Rs.3,81,771/- and directing the
Proper Officer to consider the pre-deposit and recover/ refund the
final amounts accordingly. Learned Counsel for the Petitioner further
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submits that on 16 April, 2026, the First Appellate Authority
accepted the Petitioner’s rectification application under Section 161
of MGST Act reducing the confirmed demand further to Rs.5,648/-.
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Thereafter, the Petitioner on 4 May, 2026 filed a Refund Application
in Form GST RFD-01 (ARN AA270426173795P) claiming refund of
Manisha
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Rs.19,61,750/- being the excess pre-deposit over the finally
confirmed demand of Rs.5,648/-. Learned Counsel for the Petitioner
pointed out that the demand of Rs.5,648/- was paid by the Petitioner
and compliance was also submitted to the Respondent No.3. The
Respondent No.3 however, did not sanction refund and that the
Respondent No.3 instead issued second Show Cause Notice in Form
GST RFD-08 raising a new ground, that the appellate/ rectification
order did not itself direct sanction of refund and that the Petitioner
was required to independently establish through documentary
evidence that the amount had become refundable. The Petitioner
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filed its reply in Form GST RFD-09 on 8 July, 2026. The Respondent
No.3 without granting any personal hearing as mandated by the
provisions to Rule 92(3) of the CGST/ MGST Rules, 2017 rejected
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the application for refund by the impugned Order passed on 14
July, 2026. Hence, the present Petition.
3. Learned Counsel for the Petitioner has drawn our attention
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to Judgment and Order dated 28 August, 2026 passed by this Court
in IBM India Pvt. Ltd. Vs. Union of India and Ors. in Writ Petition (L)
38052 of 2025 where this Court had taken a view that under the
erstwhile indirect tax regime, the amount paid as a condition
Manisha
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precedent for hearing of Appeal bears a character of security deposit
and not duty. Paragraph No.11 of the said Order is reproduced as
under:
“11. It is pertinent to note that under the erstwhile
indirect tax regime, the amount paid as a condition
precedent for hearing an appeal, did not bear the character
of duty but bears the character only of a security deposit,
being a statutory condition precedent for hearing of the
appeal. Such an amount needs to be returned to the
concerned appellant, whether the appellant succeeds fully
or partly. If any authority is needed in support of this
proposition, we may refer to Nelco Limited Vs. UoI (2002
(144) E.L.T. 56 (Bom.)] maintained in 2002 (144) E.L.T.
A104 (S.C.)].
4. Learned Counsel for the the Petitioners pointed out that
once the proceedings in rectification application under Section 161
of the MGST Act have attained finality, the refund application ought
to have been granted.
5. Learned Counsel for the Respondent-Revenue strongly
opposed the Petition.
6. Heard learned Counsel for the parties. The Rectification
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Application filed by the Petitioner was finally decided on 16 April,
2026. The demand was reduced to Rs.5,648/-. There is a finality
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attached to this proceeding in as much as it is nobody’s case that this
Order was challenged further. It is also an admitted fact that the
Petitioner had paid an amount of Rs.19,61,750/- being pre-deposit
while preferring the First Appeal under Section 107 of the MGST Act.
Taking into the consideration the law laid down by this Court in IBM
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India Pvt. Ltd. Vs. Union of India and Ors. (supra) passed on 28
August, 2026 and further taking into consideration the fact that the
amount of pre-deposit is lying with the Respondent, we are inclined
to allow the present Petition. Hence, the following Order:
ORDER
(i) Writ Petition No.4310 of 2026 is allowed.
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(ii) The impugned Refund Rejection Order dated 14
July, 2026 in Form GST RFD-06 which is at Exhibit-G passed
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by the Respondent No.3 Order dated 14 July, 2026 is
quashed and set aside.
(iii) The Respondents are directed to forthwith sanction
and disburse the refund of Rs.19,61,750 to the Petitioner
pursuant to Form GST-RFD-01 and the same amount to be
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refunded to the Respondents within a period of six weeks
from the date of communication of the present Order.
7. In view of above, Writ Petition No.4310 of 2026 stands
disposed of.
(SANDESH D. PATIL, J.) (M. S. KARNIK, J.)
Manisha
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