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Refex Industries Limited has won its appeal against a GST demand totaling ₹29,31,92,582 plus associated interest. The Commissioner (Appeals), CGST & Central Excise, Bhopal, issued the favorable Order-in-Appeal on October 13, 2026, and Refex received it on October 15. The order holds that the tax demand, interest and penalty confirmed in the original adjudication order are not sustainable.
What the Bhopal appellate order decided
The Commissioner (Appeals) allowed Refex’s appeals and vacated the full tax-and-penalty demand of ₹29,31,92,582, together with the related interest. The decision overturns Order-in-Original No. 192/ADC/GST/DGGI/2024-25 dated March 27, 2025, which had confirmed the demand, applicable interest and an equal penalty.
Refex disclosed the result in a company-secretary-signed exchange filing. The company said the order was not expected to have a material adverse effect on its financial position, operations or other activities.
Why the GST department raised the demand
The dispute concerned input-tax credit (ITC) of ₹14,65,96,291 claimed during the period April 2018 to March 2021. The Directorate General of GST Intelligence (DGGI), Raipur Zonal Unit, alleged that the credit was supported by invoices from suppliers that were non-existent or fictitious, in connection with coal and ash-handling work.
The original proceedings treated the alleged credit as recoverable tax and applied an equal penalty under Section 74 read with Section 122(1)(vii) and Section 122(1)(x) of the Central Goods and Services Tax Act, 2017. The appellate authority has now held the resulting demand, interest and penalty unsustainable.
Case timeline
| Date | Event |
|---|---|
| February 29, 2024 | DGGI issued show-cause notice No. 253/RZU/ADD/GST/2024. |
| March 27, 2025 | Order-in-Original No. 192/ADC/GST/DGGI/2024-25 confirmed tax, interest and an equal penalty. |
| March 2025 | Refex disclosed the demand and its intention to appeal. |
| June 24, 2025 | Refex filed three appeals under ARN Nos. AD220625013791C, AD220625013750I and AD220625013716A. |
| October 13, 2026 | Commissioner (Appeals), Bhopal issued Order-in-Appeal Nos. 232-234/COMM/BHO/GST/2026-27. |
| October 15, 2026 | Refex received the order and disclosed it to the stock exchanges. |
What happens to the ₹5.87 crore paid under protest?
Refex had paid or reversed ₹5,86,92,809 under protest while the dispute was pending. The company’s disclosure says this amount becomes eligible for a refund or re-credit, but only subject to the applicable law and procedural requirements. The appellate order itself does not mean the money is automatically credited back.
Refund is not automatic
Refex must follow the relevant GST refund or credit procedure, provide the required records and satisfy statutory conditions. The eventual treatment can depend on how the amount was recorded, whether it was paid in cash or reversed through the electronic credit ledger, and the authority’s verification. Until that process is completed, the ₹5.87 crore should be regarded as potentially recoverable rather than received cash.
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Can the GST department appeal?
Yes. Refex expressly stated that the department retains a right of further appeal to the GST Appellate Tribunal (GSTAT), when constituted, within the period prescribed under Section 112 of the CGST Act, 2017. The Bhopal decision is therefore a favorable appellate outcome, but it may not be the final procedural step.
An appeal by the department would keep the legal issue alive and could affect the timing of any refund or re-credit. The department’s decision, the date on which a further appeal is filed and any interim directions would determine what happens next. The disclosure does not say that a GSTAT appeal has been filed.
Key amounts in the case
| Amount | Meaning |
|---|---|
| ₹14,65,96,291 | ITC that DGGI alleged was ineligible because invoices were linked to non-existent or fictitious suppliers. |
| ₹29,31,92,582 | Aggregate tax-and-penalty demand vacated by the Commissioner (Appeals), excluding associated interest. |
| ₹5,86,92,809 | Amount Refex paid or reversed under protest; refund or re-credit remains subject to law and procedure. |
What the result means for Refex
The immediate legal result is that the confirmed tax, equal penalty and associated interest no longer stand under the original order. That removes the ₹29.32 crore tax-and-penalty exposure at this appellate stage. Refex has also reported no expected material adverse impact on its financials, operations or other activities.
Investors should distinguish that outcome from a completed cash recovery. The ₹5.87 crore under-protest amount still requires a statutory claim or credit process, and the department can pursue a GSTAT appeal. Future disclosures should clarify whether a refund application is filed, whether credit is restored, and whether the department challenges the appellate order.
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Bottom line for readers
Refex did win the GST appeal before the Commissioner (Appeals), and the entire ₹29,31,92,582 tax-and-penalty demand plus associated interest was set aside. The underlying allegation involved ₹14,65,96,291 of ITC tied to allegedly fictitious suppliers. Refex may seek return or re-credit of ₹5,86,92,809 paid or reversed under protest, but that is conditional on GST procedure. Because Section 112 preserves a department appeal route to GSTAT, the October 2026 order is favorable without necessarily being the final resolution.
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