2022 (3) TMI 1152 - HC - GST

Statutory interest on refund from the date of shipping bills uptill the date on which the amount of refund is paid to the petitioner herein - seeking to grant an ex-parte ad interim order in favour of the petitioner - HELD THAT - The issue as regards payment of interest is no longer res integra after the judgment of this High Court in the case of M/S AMIT COTTON INDUSTRIES THROUGH PARTNER, VELJIBHAI VIRJIBHAI RANIPA VERSUS PRINCIPAL COMMISSIONER OF CUSTOMS 2019 (7) TMI 472 - GUJARAT HIGH COURT . In such circumstances, the respondents are directed to calculate the interest on the principal amount at the rate of 7% and make the necessary payment to the writ applicant within a period of six weeks from today. Application disposed off.

Summary

Issues:
- Refund of IGST on Zero Rated Supplies
- Payment of interest on delayed refund

Refund of IGST on Zero Rated Supplies:
The petitioner filed a writ application under Article 226 seeking relief for the immediate sanction of a refund of IGST amounting to ?7,69,093 paid for goods exported as Zero Rated Supplies. The petitioner also requested interest at 12% on the refund amount until payment. The court heard arguments from both parties, where the petitioner's counsel highlighted that while the refund had been sanctioned and paid during the proceedings, the statutory interest at 7% for the delayed payment had not been included. The court referred to a previous judgment in the case of M/s. Amit Cotton Industries vs. Principal Commissioner of Customs, establishing the obligation to pay interest on delayed refunds. Consequently, the court directed the respondents to calculate and pay the interest on the principal amount at the rate of 7% within six weeks from the date of the judgment.

Payment of interest on delayed refund:
The main issue addressed in this judgment was the payment of interest on delayed refunds of IGST. The court held that the obligation to pay interest on delayed refunds is established by previous judgments, citing the case of M/s. Amit Cotton Industries vs. Principal Commissioner of Customs. The court directed the respondents to calculate and pay the interest at a rate of 7% on the principal refund amount within six weeks from the date of the judgment. This decision ensures that the petitioner receives the full entitlement, including the interest on the delayed refund, in accordance with legal principles and precedents.

This judgment sets a precedent for cases involving delayed refunds of IGST, affirming the obligation to pay interest on such delays. The court's decision emphasizes the importance of timely and complete refund processes, ensuring that petitioners are not deprived of their rightful entitlements. The judgment provides clarity on the legal framework surrounding refund claims and establishes a standard for addressing similar issues in the future.