I purchased an item using paypal. For some unknown reason the seller did not send the item.

The seller proceeded to make a refund to my paypal account. A refund that the seller (apparently) quickly cancelled.

I can't raise the issue with paypal because the "system" says that a payment was made so no complaint can be made.

How do I get to put my case to paypal?

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Firstly check your credit card as refunds will go back to the funded source.

Keep in mind that can take 3-5 days depending which bank you are with.

 

Then if no refund, open a case in eBay for INR.

First try eBay then you can try PayPal, but not the other way around.

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