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TMI Blog2023 (2) TMI 815X X X X Extracts X X X X X X X X Extracts X X X X ..... ent dated 8/10/2021 is unreasonable. The petitioner was entitled to a refund as well as interest amount vide judgment dated 8.10.2021, wherein a specific direction was issued for a refund of Rs.108 crores approximately which was deposited by the petitioner towards CGST+SGST along with applicable interest within one month. Unfortunately, this has not been done and the respondents have no justification for withholding the interest amount, which is a negligent act on the part of the respondents. The Government cannot deprive the petitioner from entitlement of the interest. Therefore, this inaction is wholly unjustified and has deprived the petitioner where the petitioner could have earned interest during this period but because of the withholding, this could not be done. The position of law is well settled and the provisions relating to interest on delayed payment of refund have been consistently held as beneficial and non-discriminatory. It is true that in the taxing statute, the principles of equity may have little role to play, but at the same time, any statute in taxation matters should also meet the test of the constitutionality and the respondents were not able to explain in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18, the petitioner paid CGST and SGST of Rs.108 Crores approximately treating the transactions to be intra-State sales. The supply was reported under GSTR1 and 3-B as a Business to Customer (B2C) supply as the GST registration of the acquiring banks was not known. 3. Later on it transpired that those transactions (for which an amount of Rs.108 crores approximately had been paid based on intra-State sales) were inter-State transactions. Accordingly, the petitioner on this plea applied for a refund which was rejected by the concerned Authorities vide order dated 19.2.2021. Accordingly, CWP No.8108 of 2021 was filed and was allowed vide order dated 8.10.2021, vide which the respondents were directed to refund the amount of Rs.108 crores approximately which was deposited by the petitioner towards CGST and SGST along with applicable interest within a period of one month. Thereafter, vide order dated 22.12.2021, passed by respondent No.2 (Annexure P-1), the claim of interest amount of Rs.15,68,26,554/- on Rs.108.41 crores (as of 31.10.2021) was rejected vide Annexure P-1 and aggrieved against the said order dated 22.12.2021, the present writ petition has been filed by the petitioner. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the principal amount along with interest unless a fresh application is filed. Learned counsel, in support of his contentions, relies upon the judgment passed by the Hon ble Apex Court in Ranbaxy Laboratories Ltd. Vs. Union of India and others, (2011) 273 E.L.T. (S.C.), and the decision adopted by this Court in M/s Dee Kay Exports Vs. Union of India and others, in CWP No.26707 of 2018, decided on 24.10.2019, where this Court allowed the writ petition challenging the rejection of interest by placing reliance on the Hon ble Apex Court judgment in Ranbaxy s case (supra), and holding that the respondents are liable to pay interest w.e.f. the expiry of three months from the date of the initial application. 6. On the other hand, learned counsel for the respondents has filed a reply dated 8.4.2022 and contends that Section 56 of the Act is crystal clear that where any claim of refund arises from an order passed by the adjudicating Authority or appellate Authority or appellate Tribunal or the Court, which has attained finality and the same is not refunded within 60 days from the date of receipt of an application filed to such order, the interest at the said rate not exceeding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w:- Section 54.:Refund of Tax (1) Any person claiming refund of any tax and interest, if any, paid on such tax or any other amount paid by him, may make an application before the expiry of two years from the relevant date in such form and manner as may be prescribed: Provided that a registered person, claiming refund of any balance in the electronic cash ledger in accordance with the provisions of sub-section (6) of section 49, may claim such refund in [such form and] manner as may be prescribed. (2) A specialized agency of the United Nations Organisation or any Multilateral Financial Institution and Organisation notified under the United Nations (Privileges and Immunities) Act, 1947, (46 of 1947), Consulate or Embassy of foreign countries or any other person or class of persons, as notified under section 55, entitled to refund of tax paid by it on inward supplies of goods or services or both, may make an application for such refund, in such form and manner as may be prescribed, before the expiry of [2 years] from the last day of the quarter in which such supply was received. (3) Subject to the provisions of sub-section (10), a registered person may c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notified by the Government on the recommendations of the Council, refund on a provisional basis, ninety per cent. of the total amount so claimed, excluding the amount of input tax credit provisionally accepted, in such manner and subject to such conditions, limitations and safeguards as may be prescribed and thereafter make an order under sub-section (5) for final settlement 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. (8) Notwithstanding anything contained in sub-section (5), the refundable amount shall, instead of being credited to the Fund, be paid to the applicant, if such amount is relatable to- (a) refund of tax paid on (export) zero-rated supplies of goods or services or both or on inputs or input services used in making (exports); (b) refund of unutilised input tax credit under subsection (3); (c) refund of tax paid on a supply which is not provided, either wholly or partially, and for which invoice has not been issued, or where a refund voucher has been issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings he becomes entitled to refund. (13) Notwithstanding anything to the contrary contained in this section, the amount of advance tax deposited by a casual taxable person or a non-resident taxable person under subsection (2) of section 27, shall not be refunded unless such person has, in respect of the entire period for which the certificate of registration granted to him had remained in force, furnished all the returns required under section 39. (14) Notwithstanding anything contained in this section, no refund under sub-section (5) or sub-section (6) shall be paid to an applicant, if the amount is less than one thousand rupees. Explanation .- For the purposes of this section, (1) refund includes refund of tax paid on zero-rated supplies of goods or services or both or on inputs or input services used in making such zero-rated supplies, or refund of tax on the supply of goods regarded as deemed exports, or refund of unutilised input tax credit as provided under sub-section (3). (2) relevant date means- (a) in the case of goods exported out of India where a refund of tax paid is available in respect of goods themselves or, as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of payment of tax. Section 56 Interest on delayed refunds 56. If any tax ordered to be refunded under sub-section (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 sub-section 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 an application filed consequent to such order, interest at such rate not exceeding nine per cent. as may be notified 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 appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsideration. Section 11B and Section 11BB insofar as they are relevant read as under: Section 11B. Claim for refund of [duty and interest, if any, paid on such duty]. - (1) Any person claiming refund of any [duty of excise and interest, if any, paid on such duty] to the Assistant [Principal Commissioner of Central Excise or Commissioner of Central Excise] [or Deputy [Principal Commissioner of Central Excise or Commissioner of Central Excise]] before the expiry of [two years] [from the relevant date] [in such form [and manner]] as may be prescribed and the application shall be accompanied by such documentary or other evidence (including the documents referred to in section 12-A) as the applicant may furnish to establish that the amount of (duty of excise and interest, if any, paid on such duty] in relation to which such refund is claimed was collected from, or paid by, him and the incidence of such [duty and interest, if any, paid on such duty] had not been passed on by him to any other person: Provided that where an application for refund has been made before the commencement of the Central Excises and Customs Laws (Amendment) Act, 1991, such application shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that no notification under clause (f) of the first proviso shall be issued unless in the opinion of the Central Government the incidence of [duty and interest, if any paid on such duty] has not been passed on by the persons concerned to any other person. (3) Notwithstanding anything to the contrary in any judgement, decree, order or direction of the Appellate Tribunal or any Court or in any other provision of this Act or the rules made thereunder or any other law for the time being in force, no refund shall be made except as provided in sub-section (2). (4) Every notification under clause (f) of the first proviso to sub-section (2) shall be laid before each House of Parliament, if it is sitting, as soon as may be after the issue of the notification, and, if it is not sitting, within seven days of its re-assembly, and the Central Government shall seek the approval of Parliament to the notification by a resolution moved within a period of fifteen days beginning with the day on which the notification is so laid before the House of the People and if Parliament makes any modification in the notification or directs that the notification should cease to have effect, the notif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rchase of the goods by such person;] [(ea) in the case of goods which are exempt from payment of duty by a special order issued under subsection (2) of section 5A, the date of issue of such order;] [(eb) in case where duty of excise is paid provisionally under this Act or the rules made there under, the date of adjustment of duty after the final assessment thereof;] [(ec) in case where the duty becomes refundable as a consequence of judgment, decree, order or direction of appellate authority, Appellate Tribunal or any court, the date of such judgment, decree, order or direction;] (f) in any other case, the date of payment of duty.] Section 11BB. Interest on delayed refunds. - If any duty ordered to be refunded under sub-section (2) of section 11B to any applicant is not refunded within three months from the date of receipt of application under sub-section (1) of that section, there shall be paid to that applicant interest at such rate, not below [five] per cent and not exceeding thirty per cent per annum as is for the time being fixed [by the Central Government, by Notification in the Official Gazette,] on such duty from the date immediately after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt act on the part of the respondents. The Government cannot deprive the petitioner from entitlement of the interest. Therefore, this inaction is wholly unjustified and has deprived the petitioner where the petitioner could have earned interest during this period but because of the withholding, this could not be done. 12. The Chart (Annexure P-3) indicating the delay in days is as follows:- S.No. Particulars Amount in Rs. 1 Date of filing of refund application via Form GST RFD-01A(ARN No.AA060419007521l) 5-Apr-19 2 Amount of refund claimed 1,084,122,958 3 Interest rate u/S 54 proviso Notification No.13/2017 Central Tax dated 28 June 2017 6% 4 60 days from filing of refund application 4-June-19 5 Date of filing of refund application via Form GST RFD-01A (ARN No.AA0610210489594) against High Court Order 28-Oct-21 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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