Navigating GST Challenges: Unsigned Orders, Refunds and Strategic Dispute Resolution

Ajay | Last updated: 03 June 2025

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This article addresses the complexities faced by taxpayers under the Indian GST regime when dealing with unsigned demand orders. It explores how payments made via Form GST DRC-03 in response to such invalid orders can be challenged as being made 'under protest'. The piece delves into the possibility of treating these payments as deposits, potentially bypassing the standard two-year refund time limit, drawing on principles from the landmark Mafatlal Industries case. It also outlines options for taxpayers, including appealing remanded proceedings, applying for Section 128A benefits, and securing refunds.

Introduction The Goods and Services Tax (GST) regime in India, governed by the Central Goods and Services Tax (CGST) Act, 2017, provides mechanisms for compliance and dispute resolution, including relief under Section 128A, introduced via the Finance Act (No. 2), 2024. This section offers a conditi

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FAQ :

An unsigned GST order lacks legal validity and may be considered void. Taxpayers can challenge its enforceability, as it may violate principles of natural justice and require authorities to issue a fresh show-cause notice or order.

Yes, if the taxpayer can demonstrate that the payment was made under duress, to avoid coercive actions, or in response to an invalid order, and explicitly stated the protest in writing. Such payments may be treated as deposits rather than admitted liabilities.

The Mafatlal case principles suggest that payments made under protest, especially in response to invalid orders, are considered 'deposits' rather than taxes paid. This can potentially exempt them from the standard two-year refund time limit under Section 54 of the CGST Act.

To avail Section 128A benefits for waiver of interest and penalties on Section 73 demands (FY 2017-18 to 2019-20), taxpayers must pay the full tax by March 31, 2025, file specific application forms (SPL-01 or SPL-02), and withdraw any pending appeals. It does not cover refunds for interest or penalties already paid.

After remand, if a fresh order is issued, the taxpayer can file an appeal under Section 107 within three months or apply for Section 128A benefits if the order falls under its scope for the specified financial years.

A refund of a DRC-03 payment made under protest as a deposit may be pursued during remanded proceedings, especially if the initial unsigned order is quashed. However, authorities might defer processing until adjudication concludes, though judicial precedents support refunds for deposits made under invalid orders if claimed promptly.