2016 (4) TMI 789 - HC - Customs

Seeking grant and sanction of interest in respect of refund claim - Respondents have clarified that once the Order-in-Original has been implemented and the refund amount has been paid to the Petitioner within the stipulated period, then, the question of payment of any interest for delayed refund does not arise. Held that - the Authorities are not going to reopen the issue of refund but are only raising plea that the Petitioner is not entitled to any interest on the refund amount for there is no delay in granting refund. It is not that issue which will be examined and we do not permit that to be examined by the Authorities upon remand. Thus, the remand order and this affidavit, if read together, the jurisdiction of the Authorities now is extremely limited. They will hear the Petitioner on the request of quantum of interest on the refund sanctioned and only that issue will be decided. That will be decided by the Authorities unmindful of and irrespective of the stand taken in the affidavit-in-reply. They shall deal with the said issue on its own merits and pass a reasoned order as expeditiously as possible. If the interest is payable as held in the order-in-appeal, then, the calculation thereof is the limited issue which the Authority must now examine. Once the statutory provisions are clear and there is delay in grant of refund, then, the interest must follow. It is only the quantum thereof which would be determined by the Authority. - Petition disposed of

Summary

Issues:
1. Petition seeking mandamus for implementing Order-in-Appeal and granting interest on refund claim.
2. Dispute over the amount of interest on the sanctioned refund.
3. Apprehension of the Petitioner regarding the reopening of the refund claim.
4. Interpretation of the affidavit-in-reply and clarification on the entitlement to interest on delayed refund.
5. Limited jurisdiction of the Authorities post remand to decide on the quantum of interest on the sanctioned refund.

Analysis:
1. The petitioner filed a writ petition under Article 226 seeking a writ of mandamus or any other direction to implement the Order-in-Appeal dated 27th October, 2015, by the Commissioner of Income Tax (Appeals) and grant interest on the refund claim.

2. The dispute revolved around the calculation of interest on the sanctioned refund. The petitioner argued that the refund claim was to be awarded with interest, highlighting the lack of discussion on interest in the Order-in-Original by the refund sanctioning Authority.

3. The Appellate Authority, after a thorough discussion, concluded that the calculation of interest was beyond its scope and remanded the matter for further examination, leading to the petitioner's apprehension regarding the potential reopening of the refund claim.

4. The Court analyzed the affidavit-in-reply and clarified that the Authorities did not intend to reopen the refund claim but were asserting that no interest was due on the refund amount due to timely payment as per the Customs Act. The Court emphasized the limited jurisdiction of the Authorities to decide solely on the quantum of interest on the sanctioned refund.

5. Post clarification, the Court disposed of the Writ Petition, emphasizing that the Authorities must determine the interest amount if payable based on statutory provisions and the delay in refund grant, with a directive to decide on the quantum of interest expeditiously within four weeks.

In conclusion, the judgment addressed the issues of implementing the Order-in-Appeal, determining interest on the refund claim, clarifying the apprehension of the petitioner, interpreting the affidavit-in-reply, and establishing the limited jurisdiction of the Authorities post remand to decide on the quantum of interest on the sanctioned refund.