2023 (3) TMI 1510 - HC - Central Excise

Interest payable to an assessee on delayed refund of exemptions - HELD THAT - The appellant Department is directed to make payment of the interest on delayed refund to the respondent assessee within a period of 2(two) months from today. However, the assessee shall furnish an undertaking that in case the Revenue succeeds in the aforesaid SLP, the interest amount paid under this order shall be reimbursed to the Department. Appeal disposed off.

Summary

Issues:
Whether interest is payable to an assessee on delayed refund of exemptions.

Analysis:
The High Court, comprising the Chief Justice and Mr. Justice Soumitra Saikia, heard appeals by the Revenue on the issue of interest payment to an assessee for delayed refund of exemptions. The Department's counsel, Mr. S.C. Keyal, highlighted that the matter is pending before the Supreme Court in SLP(C) No.016322/2018. On the other hand, Dr. A. Saraf, representing the respondent in WA No.102/2022, pointed out that a similar appeal, WA No.160/2021, had been disposed of by the Court subject to the condition that interest payment would depend on the outcome of the pending SLP. The Court directed the Department to make the interest payment to the assessee within two months, with the condition that if the Revenue succeeds in the SLP, the interest amount must be reimbursed.

The judgment resolved the common legal question regarding interest payment on delayed refund of exemptions. The Court considered the submissions from both parties and took into account the pending SLP before the Supreme Court. The directive to the Department to make the interest payment within a specified timeframe demonstrates the Court's decision to balance the interests of both the assessee and the Revenue. By linking the interest payment to the outcome of the pending SLP, the Court ensured a fair resolution that safeguards the rights of both parties involved in the dispute.

Overall, the judgment provides a clear and practical solution to the issue at hand, ensuring that the assessee receives the interest on delayed refund while also addressing the potential impact of the pending SLP on the matter. The Court's decision reflects a balanced approach that upholds the principles of justice and fairness in resolving disputes related to tax exemptions and interest payments.