Supreme Court Clarifies: Refund of GST Appeal Pre-Deposit Falls Under Section 107(6), Not Section 54 – High Court's Interpretation Set Aside"

The Hon'ble Supreme Court of India in State of Jharkhand & Ors. vs. M/s. BLA Infrastructure Private Limited [Civil Appeal No. of 2026 (arising out of SLP(C) No. of 2026) @ Diary No. 56452/2025] dated January 09, 2026 held that the refund to be made to the Respondent in relation to the statutory pre-deposit made by it for maintaining the appeal, in which it thereafter succeeded, would be under the provisions of Section 107(6) read with Section 115 of the Jharkhand Goods and Services Tax Act, 2017, and not under Section 54 thereof. The Court held that the exercise undertaken by the High Court with regard to Section 54 was unnecessary and set aside the interpretation of Section 54 undertaken in that context. The Court directed that the amount to be refunded to the Respondent shall be refunded with interest thereon in accordance with law within a period of four weeks.

FACTS OF THE CASE

M/s. BLA Infrastructure Private Limited (hereinafter referred to as "the Respondent") had filed an appeal before the Appellate Authority under the Jharkhand Goods and Services Tax Act, 2017 (hereinafter referred to as "the Jharkhand GST Act"). For maintaining the appeal, the Respondent made a statutory pre-deposit as required under the provisions of the Jharkhand GST Act. The Respondent thereafter succeeded in the appeal.

Upon succeeding in the appeal, the Respondent became entitled to refund of the statutory pre-deposit made by it. The matter reached the Hon'ble High Court of Jharkhand at Ranchi vide WPT No. 6527/2024. The High Court, vide judgment dated January 30, 2025 (hereinafter referred to as "the impugned judgment"), interpreted Section 54 of the Jharkhand GST Act and granted relief to the Respondent pursuant to such exercise.

Aggrieved by the impugned judgment, the State of Jharkhand & Ors. (hereinafter referred to as "the Appellants") filed a Special Leave Petition (hereinafter referred to as "the SLP") before the Hon'ble Supreme Court challenging the interpretation of Section 54 of the Jharkhand GST Act undertaken by the High Court in the context of refund of statutory pre-deposit.

The learned senior counsel appearing for the State of Jharkhand submitted that the refund to be made to the Respondent in relation to the statutory pre-deposit made by it for maintaining the appeal, in which it thereafter succeeded, would be under the provisions of Section 107(6) read with Section 115 of the Jharkhand GST Act, and not under Section 54 thereof. It was therefore submitted that the High Court was in error in interpreting Section 54 thereof in that context and granting relief pursuant to such exercise.

ISSUE

Whether the refund of statutory pre-deposit made for maintaining an appeal under the Jharkhand GST Act, upon the appellant succeeding in such appeal, is governed by Section 107(6) read with Section 115 of the Jharkhand GST Act or by Section 54 thereof?

HELD BY THE COURT

The Hon'ble Supreme Court of India in State of Jharkhand & Ors. vs. M/s. BLA Infrastructure Private Limited [Diary No. 56452/2025] held that:

The Court observed that it would not be necessary to issue notice and put the Respondent on notice in view of the order that it proposed to pass, which would have no adverse impact upon the Respondent. The Court noted that in the event the order did have any such adverse effect, it would be open to the Respondent to seek reopening of the matter.

The Court agreed with the submission made by the learned senior counsel for the State of Jharkhand that the subject refund was relatable to Section 107(6) read with Section 115 of the Jharkhand GST Act, and not under Section 54 thereof. The Court held that to that extent, the exercise undertaken by the High Court with regard to Section 54 was unnecessary.

Accordingly, the Court made the position clear and set aside the exercise of interpretation of Section 54 of the Jharkhand GST Act undertaken by the High Court in that context. The Court disposed of the appeal on the aforestated terms.

The Court further directed that the amount to be refunded to the Respondent shall be refunded with interest thereon in accordance with law within a period of four weeks from the date of the judgment.

RELEVANT SECTIONS

• "Section 107(6) of the Jharkhand Goods and Services Tax Act, 2017" – Pre-deposit for filing appeal before Appellate Authority

• "Section 115 of the Jharkhand Goods and Services Tax Act, 2017" – Interest on delayed refunds

• "Section 54 of the Jharkhand Goods and Services Tax Act, 2017" – Refund of tax

PARI MATERIA / CASES REFERRED

1. M/s. BLA Infrastructure Private Limited v. State of Jharkhand & Ors.: WPT No. 6527/2024 (Jharkhand High Court) dated January 30, 2025 – The Hon'ble Jharkhand High Court interpreted Section 54 of the Jharkhand GST Act in the context of refund of statutory pre-deposit and granted relief to the Respondent. This interpretation was set aside by the Supreme Court in the present judgment, holding that refund of statutory pre-deposit upon success in appeal is governed by Section 107(6) read with Section 115, and not by Section 54.

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