M/S Rawmet Resources P LTD., Bbsr vs. Union Of INDIA
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Cause title — parties, addresses and appearances
ORDER 14.08.2026 (Hybrid mode)
The petitioner has filed this writ petition beseeching grant of following relief(s):
“Under the facts and in the circumstances of the case, in the interest of justice and equity, it is therefore prayed that this Hon’ble Court may graciously be pleased to admit this writ petition and issue notice to the Opp. Parties to show cause as to why interest shall not be granted to the petitioner from July’2017 to March’2021 as per Section 56 of the CGST/OGST Act on the refunded amount of Rs.17,59,39,952.00 and if the Opp. Parties fail to show cause or show insufficient cause, after hearing the parties, may issue direction to the Opp. Parties to grant interest to the petitioner on the refunded amount of Rs.17,59,39,952.00 within a stipulated time.
And/or pass such other order(s) as this Hon’ble Court may deem fit and proper in the circumstances of the case.
And for which act of kindness, the petitioner shall as in duty bound ever pray.”
Mr. Prakash Kumar Jena, learned counsel submitted that the petitioner approached the authority concerned by way of an application under Section 56 of the Central Goods and Services Act, 2017/Odisha Goods and Services Tax Act, 2017 (collectively, “the GST Act”) for grant of interest on amount of refund granted pertaining to periods July, 2017 to March, 2021. It is stated that all the bill of entries were on CIF Payment basis and the GST paid on Ocean Freight was claimed as refund on the basis of decision of the Hon’ble Supreme Court of India in the case of Union of India Vrs. Mohit Minerals Pvt. Ltd., 2022 SCC OnLine 657. Accordingly, the petitioner claimed for interest for delayed payment of refund, which was refused by order dated 30th June, 2023 by the Assistant Commissioner, opposite party no.
He submitted that the refusal of interest is contrary to decision rendered by this Court in Paradeep Phosphates Ltd. vrs. Additional Commissioner, Goods and Services Tax (Appeals), Bhubaneswar, 2026 (106) GSTL 112 (Ori).
Learned counsel for the petitioner placing reliance on a decision of a Division Bench of this Court rendered in the case of Paradeep Phosphates Ltd. Vrs. Additional Commissioner, Goods and Services Tax (Appeals), Bhubaneswar, 2026 (106) GSTL 112 (Ori), submitted that the petitioner is entitled to interest as the fact situation of the said reported case is akin to the present case. He drew
attention of this Court to paragraphs-7, 7.1, 7.2, 7.3 and 7.4 of the said judgment, which read thus:
“7. With the factual and legal position as discussed above, it is manifest that the IGST collected on the quantum of “ocean freight” on the basis of Notifications dated 28.06.2017 is found to be illegal and in pursuance of Order dated 01.08.2022 of this Court in the petitioner’s own case the Revenue has refunded the amount. It is in dispute whether the petitioner is entitled to interest on said refunded amount from the date of its deposit as the levy itself was declared not in consonance with the constitutional provisions. There is nothing in Mohit Minerals Pvt. Ltd. (supra) to comprehend that the interpretation and declaration of the Hon’ble Supreme Court of India would operate prospectively.
Regard being had to the conspectus of very many judgments on the subject as referred to in the foregoing paragraphs, it is unequivocal that the decision of the Hon’ble Supreme Court of India unless spells out explicitly to have prospective effect, the same is to be understood as existing from the inception. In the absence of any direction by the Hon’ble Supreme Court of India that the interpretation set forth or law laid down by it would be prospective in operation, the argument of the Revenue to avoid payment of interest that the refund flows from the ruling of the Hon’ble Supreme Court of India in Mohit Minerals Pvt. Ltd. (supra) and the department having refunded the IGST so collected to the petitioner in consideration of application under Section 54 of the GST Act in this respect within the period stipulated in the statute cannot be accepted.
In such view of the matter, this Court cannot sustain the Order dated 15.01.2024 passed by the Additional Commissioner, GST (Appeals) in Order-in-Appeal
No.158/GST/BBSR/ADC/2023-24 affirming the Order dated 06.02.2023 passed by the Assistant Commissioner, Central GST and Central Excise, Cuttack-II Division, Cuttack in Form RFD-06 refusing to grant interest on the amount of refund. Hence, the Order dated 15.01.2024 vide Annexure-10 is set aside and Order dated 06.02.2023 vide Annexure-8 is quashed. Therefore, taking cue from the Order dated 05.08.2024 passed in the instant case, as referred to above, this Court directs the opposite parties to pay interest on the amount of the IGST as refunded.
Since the question involved in the present case relates to interest on amount refunded, it is clear that the petitioner is entitled to interest on the amount refunded with respect to IGST collected on “ocean freight” for the period the opposite parties retained the same and restrained the petitioner from utilising it. In other words, such interest should commence to run from the date on which the petitioner parted with the money in the first instance and was restrained from using such amount representing the IGST on the component of “ocean freight”.
The refund itself is as a result of a finding that the tax ought not to have been collected from the petitioner in the first place. If the tax has to be refunded, and in fact, has been refunded to the petitioner, clearly, therefore, in the considered view of the Court, the interest thereon should begin to run from the date of the deposit of such tax. Consequently, the opposite party-competent authority will pay to the petitioner simple interest @6% per annum on the amount of refund from the period beginning with the date of making payment of the IGST on “ocean freight” in the first instance till the date of actual payment of refund made which shall not be more than eight weeks from today. If there is any further delay than the said period
in payment of interest on the refunded amount, the authority concerned will be liable to pay simple interest @9% per annum on the sum refunded for the period of delay.”
Mr. Avinash Kedia, learned Junior Standing Counsel appearing for the opposite parties submitted that the claim of the petitioner in the instant case is identical to the reported case cited above, i.e., Paradeep Phosphates Ltd. (supra).
Faced with such situation, this Court disposes this writ petition in terms of the judgment rendered by the Division Bench of this Case in the case of Paradeep Phosphates Ltd. (supra). The opposite parties shall grant interest in the manner specified in the aforesaid reported judgment within a period of six weeks hence.
With the aforesaid observation and direction, this writ petition along with pending interlocutory application(s) is disposed of.
(Manash Ranjan Pathak) Judge
(M.S. Raman) Judge
Laxmikant/MRS
Reproduced from the public record of the Orissa High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.