2019 (11) TMI 220 - HC - GST

Refund claims - time limitation - dealing of refund claims on priority basis since delay in refund of tax beyond the period prescribed in law very severely impedes the generation of business and pace of trade - Rule 91 (2) of the CGST and DGST Rules - HELD THAT - Though the Petitioner has been granted refund by the Respondent, the claim for interest has been rejected and in this respect, the Respondent have issued a communication dated 14.10.2019. We permit the Petitioner to place on record the said communication along with such other documents that the Petitioner wishes to place on record in relation thereto within two weeks. Reply to the additional affidavit be filed by the Respondents within two weeks thereafter. List on 20.11.2019.

Summary

Issues involved:
1. Delay in processing refund claims by Respondent No. 5.
2. Rejection of interest claim by Respondent.
3. Status of provisional refund under Rule 91 of CGST and DGST Rules.

Analysis:
1. The High Court emphasized the importance of dealing with refund claims promptly due to the adverse impact of delays on business and tax collection. Respondent No. 5 was directed to submit an affidavit within two weeks detailing the status of 593 pending refund claims in Delhi, especially those exceeding sixty days. The affidavit must also explain the reasons for delays and provide an update on the provisional refund under Rule 91 (2) of the CGST and DGST Rules, as alleged delays were reported in granting provisional refunds.

2. Despite the Respondent granting the refund to the Petitioner, the claim for interest was rejected, as indicated in a communication dated 14.10.2019. The Court allowed the Petitioner to submit the communication and any relevant documents within two weeks for consideration. The Respondents were directed to file a reply to the additional affidavit within two weeks after the submission. Respondent No. 5 was exempted from future appearances, and the case was scheduled for the next hearing on 20.11.2019 to address the unresolved interest claim issue.

This judgment primarily focuses on addressing delays in processing refund claims, the rejection of interest claims, and ensuring compliance with provisions related to provisional refunds under the CGST and DGST Rules. The Court's directives aim to streamline the refund process, uphold the rights of the Petitioner, and maintain transparency and efficiency in tax refund procedures.