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2021 (12) TMI 222 - HC - GSTDisbursement of refund - Section 56 of the CGST Act - HELD THAT - This non-attendance of the issue has resulted into not only the non-payment of the refund amount which is otherwise not being disputed by the respondents, but has caused hardship for the petitioner and many others who for no fault of theirs are suffering. Payment of interest on late payment can never furnish the reason to delay payment, the four weeks time is granted to resolve the issue, if need be felt for outsourcing by the authority concerned for taking assistance of experts on the part of the software engineers, let that also be taken for attending to this issue. The authority concerned may also consider of taking in advance, the amount of ₹ 39,05,121/- from the petitioner of the sum of the Welfare Fund and making the payment to the amount of ₹ 51,27,47,703/- to the petitioner is entirety, if that can act as a solution before the software is improvised. However, if nothing materializes, let the amount be paid at the end of four weeks to the petitioner without fail with interest. If not paid at the end of four weeks, the rate of interest on the sum due shall be 12% on the entire sum from the due date of payment till the actual date of payment. Petition disposed off.
Issues:
1. Delay in disbursement of refund amount under CGST Act. 2. Non-availability of software module for crediting refund amount. 3. Calculation and payment of interest on delayed refund amount. Issue 1: Delay in disbursement of refund amount under CGST Act The petitioners filed a writ petition under Article 226 challenging the inaction of the respondents in disbursing a refund amount of ?50,88,42,582 along with interest under Section 56 of the CGST Act. The petition highlighted that though the refund was sanctioned, it had not been disbursed even after one year from the date of sanction. The court noted that no reply had been received by the petitioners regarding their communications. The respondents acknowledged the sanction order but cited technical glitches for the non-disbursement. The court observed that interest at the rate of 6% on the refund amount is payable if not refunded within 60 days as per Circular No.125/44/2019-GST. The court directed the authorities to resolve the issue within four weeks to avoid further delay in payment. Issue 2: Non-availability of software module for crediting refund amount The respondents explained that the refund amount could not be credited due to a technical glitch in the software system. They mentioned that the system lacked the functionality to credit the sanctioned amount to the petitioner and the Consumer Welfare Fund. The authorities had taken steps to address the issue by corresponding with higher officials, but the necessary functionality was still under development. The court granted four weeks for the authorities to resolve the software-related issues and directed them to consider alternative solutions if necessary, emphasizing the importance of timely payment to avoid hardship for the petitioners. Issue 3: Calculation and payment of interest on delayed refund amount The petitioners argued for the calculation of interest on the delayed refund amount as per Section 56 of the CGST Act. The court agreed that interest should be paid on the refund amount if not refunded within 60 days from the date of application. It directed the authorities to ensure the payment of interest along with the principal refund amount. The court emphasized that the delay in payment should not be justified by the need to calculate interest and instructed the authorities to expedite the resolution of the issue to prevent further hardship for the petitioners. If the payment was not made within four weeks, the court mandated an interest rate of 12% on the outstanding amount until the actual date of payment. In conclusion, the High Court of Gujarat addressed the issues of delay in refund disbursement, non-availability of the software module for crediting the refund amount, and the calculation and payment of interest on the delayed refund amount under the CGST Act. The court directed the authorities to resolve the software-related issues within four weeks and ensure the timely payment of the refund amount along with the applicable interest to prevent further hardship for the petitioners.
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