2021 (10) TMI 373 - HC - GST

Refund claim - Rule 97A of the Central Goods and Services Tax (CGST) Rules, 2017 - HELD THAT - Admittedly, neither the amount of refund awarded under the order dated 06.01.2020 nor any interest has been paid to the petitioner, till date. By earlier order last opportunity had been allowed to the respondents to either pay up the entire amount or explain their conduct. Neither the amount has been paid up nor any further affidavit has been filed. Accordingly, the matter has been proceeded, there is no dispute to the fact that an amount of ₹ 1,28,50,535/- is refundable to the petitioner by respondent no.6 for the month of July, 2019. Also, upon exchange of pleadings, there is no dispute that the application for refund was filed by the petitioner manually, on 27.09.2019 yet the same was not processed and the refund was not directed to be paid within a period of sixty days therefrom. Once the application had been processed and or order passed, which has attained finality, the respondents cannot escape the plain effect of the same. They also cannot escape the liability of interest that arises on non-compliance of the same. Respondent no.6 shall refund the entire amount of ₹ 1,28,50,535/- together with interest from the date against 27.11.2019 till the date of issuance of the demand draft @ 6%. The respondents themselves shall have choice to make payment either through online mode or through bank draft within a period of one month from today - petition allowed.

Summary

Issues:
1. Mandamus sought for refund of due amount.
2. Delay in refund process and interest liability.
3. Dispute regarding online vs. manual filing of application.
4. Legal consequences of delayed refund order.
5. Respondents' defense and liability for interest.
6. Application of Rule 97A and Circular No.125/44/2019-GST.
7. Relief granted by the court.

Analysis:
1. The petitioner filed a petition seeking a mandamus for the refund of ?1,28,50,535/- due under an order dated 06.01.2020. The refund related to July 2019, and interest was also sought due to non-payment. The petitioner had filed an application for refund manually under Rule 97A of the CGST Rules, 2017. The refund order was passed beyond the stipulated sixty days, leading to interest liability under Section 56 of the CGST Act, 2017.

2. Despite the order for refund and interest, neither the amount nor the interest was paid to the petitioner. The court noted that the respondents failed to comply with the refund process within the prescribed time frame, resulting in ongoing interest liability. The court emphasized the importance of timely refund and interest payment in such cases.

3. The respondents raised a defense regarding the mode of application filing, arguing that the application should have been processed online. However, the court held that Rule 97A allowed for manual filing of applications, overriding the subsequent Circular No.125/44/2019-GST, which prescribed online filing. The court emphasized that once an application is processed and an order passed, the respondents cannot escape their obligations.

4. The court rejected the respondents' argument that they acted in the best interest of revenue, emphasizing that the petitioner suffered due to the delayed refund process. The court directed respondent no.6 to refund the entire amount with interest, giving the respondents the choice to make payment online or through a bank draft within one month.

5. The court allowed the writ petition, providing relief to the petitioner and highlighting the need for timely resolution of similar disputes between the respondents. No costs were awarded in the judgment.