They immediately issue refunds for any cancelled order, only thing is they keep threshold period of 7 working days for bank to credit refunded money back to accounts and this is by every company, you'll get the amount with 24hrs back once order is cancelled.
I guess the offer wasn't fake as it was through Retail Net which is Flipkart's prime seller, but they might have forgot to make the product out of stock at the correct time, and now they would need to issue apologies for cancelled orders