Pending Appellate Proceedings Without Interim Stay Cannot Bar Release of Deposited Refund Amounts

The Petitioner successfully appealed a Refund Rejection Order (dated 05.02.2024) before the Objection Hearing Authority (OHA), which set aside the rejection on 10.05.2024

Despite this and subsequent High Court directions in W.P(C) 15886/2024 to process the refund, the Respondents failed to comply.

The Petitioner filed W.P(C) 486/2025, where the Court directed the refund with statutory interest.

Instead of paying, the Department challenged the OHA order in W.P(C) 6571/2025, during which the Court directed the Department to deposit the refund amount with the Registrar General.

Eventually, W.P.(C) 6571/2025 was disposed of, relegating the Department to the Appellate Tribunal.

The Petitioner filed this contempt petition seeking the release of the deposited funds, noting that no interim stay currently exists.

1. Whether the deposited refund amount should be released to the Petitioner in the absence of any interim stay order from the Appellate Tribunal.

The Court applied the principles of the Central Goods and Services Tax (CGST) Act and Delhi Goods and Services Tax (DGST) Act regarding the entitlement to refunds following the reversal of a rejection order.

It also relied on the principle of judicial discipline and the finality of orders, where directions of a Writ Court must be implemented unless stayed by a superior forum or a competent tribunal.

The court exercised its jurisdiction under the Contempt of Courts Act to ensure the fruits of the decree reached the successful litigant when the statutory appeal provided no interim protection to the Department.

The Court observed that the Objection Hearing Authority had already ruled in favor of the Petitioner and set aside the refund rejection.

Although the Department was relegated to its statutory remedy before the newly functional GST Appellate Tribunal, the Court emphasized that the mere filing of an appeal does not operate as a stay on the refund.

The Department had already deposited the liability amount with the Registrar General of the High Court pursuant to earlier orders in W.P.(C) 6571/2025.

Since there is currently no interim order from the Appellate Tribunal preventing the release of the money, the Court reasoned that the Petitioner is entitled to the funds to satisfy the various judicial directions issued in their favor.

It directed the Registrar General to release the amount lying deposited in the Court to the Petitioner after an expiry of three weeks from the date of the order, subject to any further orders that may be passed by the GST Appellate Tribunal in the Department's appeal.

The contempt petition was disposed of accordingly.