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TMI Blog2019 (7) TMI 1282X X X X Extracts X X X X X X X X Extracts X X X X ..... ayed payment at the rate of 9% per annum - On the aggregate amount of refund, the writ applicants are entitled to 9% per annum interest from the date of filing of the GSTR03. The respondents shall undertake this exercise at the earliest and calculate the requisite amount towards the interest - application disposed off. X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of CGST Act relating to refunds shall, mutatis mutandis, apply, so far as may be, in relation to integrated tax as they apply in relation to central tax as they apply in relation to central tax as if they are enacted under this Act. 2.7 The petitioners further state that Rule 2 of the Integrated Goods and Services Tax Rules, 2017 provides that the Central Goods and Services Tax Rules, 2017, for carrying out the provisions specified in section 20 of the Integrated Goods and Services Tax Act, 2017 shall, so far as may be, apply in relation to integrated tax as they apply in relation to central tax. 2.8 The petitioners further state that, section 54 of the CGST Act provides for refund as envisaged under section 16 of the IGST Act in a time bound manner. 2.9 The petitioners state that Rule 91 of CGST Rules, 2017 interalia provide that the provisional refund is to be granted within 7 days from the date of acknowledgment of the refund claim. An order for provisional refund is to be issued in Form GST RFD04 along with payment advice in the name of the claimant in Form GST RFD 05. The amount will be electronically credited to the claimant's bank account. 2.10 The peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion No.13/2017 - Central Tax, dated 28062017 and Notification No.6/2017 - Integrated Tax dated 28062017 has fixed the rate of interest from the 1st day of July, 2017 at 6% p.a. and 9% p.a. for the purposes of section 56 and proviso to section 56 of CGST Act 2017 respectively. 2.15 The petitioners state that it is evident from the bare perusal of the Rule 94 of the CGST Rules that proper officer is mandated to order sanctioning of interest on delayed refunds suo motu, where any interest is due and payable to the applicant under section 56, without any application to be made by the registered person for any delay in the refund. 2.16 Without prejudice to the submission in para 2.15 above, the petitioners further state that there is also no option available on the common portal to enable the registered person to make application for claiming compensation/ interest on delayed refund. It would be evident from the perusal of the above user manual that the options available on the GST portal regarding selection of the refund type has no option to claim interest for delayed refund. 2.17 The petitioners further state that it received the refund of integrated tax paid on export of go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the delay. In such circumstances referred to above, Mr. Shraff, the learned counsel prays that this Court may award appropriate compensation alongwith the interest for the delay in granting of refund. 6. On the other hand, this writapplication has been vehemently opposed by the learned counsel appearing for the respondents. The learned counsel appearing for the respondents submitted that unless there is a specific provision providing for the entitlement of the interest of refund, no interest would be available since equity has no role to play in the matters of taxation. The learned counsel appearing for the respondents submitted that there is no express provision made for the entitlement to the interest to the assessee as referred to above. The learned counsel for the respondents submitted that there being no merit in this application, the same may be rejected. 7. Having heard the learned counsel appearing for the parties and having gone through the materials on record, the only question that falls for our consideration is - whether the writapplicants are entitled to seek compensation alongwith the interest for the delayed refund? ANALYSIS:- 8. Before adverting to the riva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the refund claim after due verification of documents furnished by the applicant. (7) The proper officer shall issue the order under subsection (5) within sixty days from the date of receipt of application complete in all respects. 11. Rule 91 of the CGST Rule is reproduced herein below:- Rule 91 Grant of provisional refund: (1) The provisional refund in accordance with the provisions of subsection (6) of section 54 shall be granted subject to the condition that the person claiming refund has, during any period of five years immediately preceding the tax period to which the claim for refund relates, not been prosecuted for any offence under the Act or under an existing law where the amount of tax evaded exceeds two hundred and fifty lakh rupees. (2) The proper officer, after scrutiny of the claim and the evidence submitted in support thereof and on being prima facie satisfied that the amount claimed as refund under subrule (1) is due to the applicant in accordance with the provisions of subsection (6) of section 54, shall make an order in FORM GST RFD04, sanctioning the amount of refund due to the said applicant on a provisional basis within a period not exceeding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 96: Refund of Integrated Tax paid on Goods or Services Exported out of India. (1) The shipping bill filed by an exporter of goods shall be deemed to be an application for refund of integrated tax paid on the goods exported out of India and such application shall be deemed to have been filed only when:- (a) the person in charge of the conveyance carrying the export goods duly files a departure manifest or an export manifest or an export report covering the number and the date of shipping bills or bills of export; and (b) the applicant has furnished a valid return in FORM GSTR3 or FORM GSTR3B, as the case may be; (2) The details of the relevant export invoices in respect of export of goods contained in FORM GSTR1 shall be transmitted electronically by the common portal to the system designated by the Customs and the said system shall electronically transmit to the common portal, a confirmation that the goods covered by the said invoices have been exported out of India. Provided that where the date for furnishing the details of outward supplies in FORM GSTR1 for a tax period has been extended in exercise of the powers conferred under section 37 of the Act, the supplier ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payable in respect of such refund from the date immediately after the expiry of sixty days from the date of receipt of the application under the subsection till the date of refund of such tax. Section56 of the CGST Act reproduced herein below:- Section56: Interest on Delayed Refunds:- If any tax ordered to be refunded under subsection (5) of section 54 to any applicant is not refunded within sixty days from the date of receipt of application under subsection (1) of that section, interest at such rate not exceeding six per cent. as may be specified in the notification issued by the Government on the recommendations of the Council shall be payable in respect of such refund from the date immediately after the expiry of sixty days from the date of receipt of application under the said subsection till the date of refund of such tax: Provided that where any claim of refund arises from an order passed by an adjudicating authority or Appellate Authority or Appellate Tribunal or court which has attained finality and the same is not refunded within sixty days from the date of receipt of application filed consequent to such order, interest at such rate not exceeding nine per cent. a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the property without due recourse to law and this withholding cannot be termed to be a lawful one nor an established procedure under the law. Therefore, this inaction is wholly unjustified and this has really caused the deprivation of the petitioner's enjoyment of the property namely the aforesaid amount. Therefore, this is positively violative of the provision of Article 300A in Chapter IV under Part XII of the Constitution of India. When there is breach of constitutional right either by omission or by commission by the State such breach can be remedied under Article 226 of the Constitution of India. The petitioner could have earned interest during this period but because of the withholding this could not be done. I find in support of my observation from the judgment cited by Mr. Chowdhury as above. In that case a pre deposit amount was directed to be refunded with interest at the rate of 15% per annum. Of course at that point of time the rate of interest of Bank might be higher, but having regard to the present facts and circumstances of this case the rate of interest as allowable now admittedly by the Reserve Bank of India in case of its bond not exceeding 8% per annum, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statute or that the taxing statute is silent about the same". 20. The word 'Compensation' has been defined in P. Ramanatha Aiyar's Advanced Law Lexicon 3rd Edition 2005 page 918 as follows: "An act which a Court orders to be done, or money which a Court orders to be paid, by a person whose acts or omissions have caused loss or injury to another in order that thereby the person damnified may receive equal value for his loss, or be made whole in respect of his injury; the consideration or price of a privilege purchased; some thing given or obtained as an equivalent; the rendering of an equivalent in value or amount; an equivalent given for property taken or for an injury done to another; the giving back an equivalent in either money which is but the measure of value, or in actual value otherwise conferred; a recompense in value; a recompense given for a thing received recompense for the whole injury suffered; remuneration or satisfaction for injury or damage of every description; remuneration for loss of time, necessary expenditures, and for permanent disability if such be the result; remuneration for the injury directly and proximately caused by a breach of con ..... 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