2023 (8) TMI 647 - HC - GST

Refund of amount recovered from the petitioner upon encashment of the bank guarantee furnished by the petitioner to secure its interest qua the penalty - before the petitioner could have availed any remedy in appeal that Bank Guarantee is disclosed to have been encashed on that date itself - HELD THAT - Section 54 of IGST Act required the petitioner to move an application in the prescribed form and manner within two years from the refund being becoming due. By virtue of Section 54(7) of the Act that claim ought to have been dealt with and disposed of within 60 days of its receipt. It is also not in dispute by virtue of Section 56 any delay beyond statutory period of 60 days in dealing with the claim for refund the revenue entailed the interest liability @ 6% from the end of period of 60 days. In the first place there is no contrary opinion existing and perhaps none may arise as the language of the statute as it stands admits of no doubt. As to the filing of physical/offline application on 02.04.2019 there is no doubt raised by the revenue. Therefore that application had been filed within the statutory period of two years from the date when the refund became due i.e. upon the first appeal order dated 09.03.2018 being passed. Therefore the revenue authorities were obligated in law to deal with that application in terms of Section 54(7) of the Act within a period of 60 days. Failing that the revenue further became exposed to discharge interest liability on the delay in making the refund at the statutory rate from the end of 60 days from 02.06.2019. A writ of mandamus is issued to respondent no. 3 to dispose of the petitioner s refund claim application dated 02.04.2019 and to pay up the amount of refund claim together with statutory interest within a period of three months from today - Petition allowed.

Summary

Issues Involved:
The issues involved in the judgment are the direction for refund of a recovered amount, delay in processing the refund claim, interpretation of relevant provisions of the Act and Rules, and the obligation of revenue authorities to deal with refund applications within a specified time frame.

Refund of Recovered Amount:
The petitioner, an ex-UP dealer, sought a direction for the refund of Rs. 47,32,040/- recovered upon encashment of a bank guarantee furnished to secure interest regarding a penalty order. The goods were seized, leading to a demand for tax and penalty. The petitioner challenged the order, which was subsequently allowed, but the refund was not processed, citing the lack of an online application for refund. The petitioner had filed a physical application within the statutory period, and the court directed respondent no. 3 to dispose of the refund claim and pay the amount with interest.

Delay in Processing Refund Claim:
The delay in processing the refund claim was attributed to the petitioner's alleged failure to file an online application despite communications. The petitioner argued technical glitches prevented online filing and submitted physical applications within the statutory period. The court held that the petitioner's physical application was valid, and the revenue authorities were obligated to process it within 60 days, failing which interest liability accrued.

Interpretation of Provisions of the Act and Rules:
The court referred to Section 54(1), Section 54(7), and Section 56 of the Act, along with Rule 97-A of the UP GST Rules, 2017. It noted that the petitioner's offline application was within the statutory period, as per Rule 97-A, which allows manual filing. The court emphasized that the revenue authorities were required to deal with refund claims within the specified time frame and were liable for interest on delays.

Obligation of Revenue Authorities:
The court issued a writ of mandamus directing respondent no. 3 to process the petitioner's refund claim and pay the amount with statutory interest within three months. It emphasized the finality of the appeal order and the procedural requirements for refund, highlighting the revenue's obligation to adhere to the statutory timelines for processing refund claims. The petition was allowed, with no costs imposed.