M/S Synchrony International Services PVT. LTD. vs. Assistant Commissioner (St)

Held

The Court held that the summary sheet containing the details of refund claims already allowed and the subsequent claim for refund of interest should be produced before the Proper Officer for scrutiny and sanction. The Court directed the petitioner company or its authorized representative to appear before the Proper Officer on August 6, 2026, with relevant details. The Proper Officer was instructed to scrutinize the claim and take a decision in accordance with the law within two weeks thereafter. Crucially, the Court directed the Proper Officer to proceed without insisting upon the certification as required under Rule 89(2)(m) of the CGST Rules, acknowledging that the claim solely pertained to the interest component on refunds already sanctioned in the petitioner's favor. The Court disposed of all writ petitions in this manner.

Facts

The petitioners, M/s Synchrony International Services Pvt. Ltd. and its director, filed multiple writ petitions challenging the rejection of their applications for interest on delayed refunds. The Assistant Commissioner (ST) rejected these applications via Deficiency Memos dated November 12, 2025. The petitioners sought interest on delayed refunds amounting to significant sums, calculated from 60 days after the initial refund application date until the final payment date, at rates of 6% and 9% as per Section 56 of the CGST Act. The core of the dispute revolves around the procedural requirements for claiming such interest, specifically the applicability of Rule 89(2)(m) of the CGST Rules.

Key Issues

1. Whether the rejection of the petitioner's application for interest on delayed refund by the Assistant Commissioner (ST) was illegal, arbitrary, perverse, violative of principles of natural justice, and without jurisdiction, as it was passed without the authority of law, under Section 56 of the CGST Act? Petitioner's arguments: The petitioner contended that the rejection was illegal as the refund claim was for interest on delayed refunds, not for tax, interest, or any other amount that would necessitate a Chartered Accountant's certificate under Rule 89(2)(m) of the CGST Rules. They argued that the interest component could not have been passed on to any end consumer and that the refund should have included interest calculated up to the disbursement date as per Section 56 of the CGST Act, making the insistence on Rule 89(2)(m) unnecessary. Revenue's arguments: The revenue, through the Special Government Pleader, referred to Circular No. 125/44/2019-GST, adopted by the State Tax Department, which mandates that refund applications must conform to certain requirements. They argued that the deficiency memos pointed out the need for specific documents, including an undertaking related to Section 16(2)(c) and Section 42(2) of the CGST Act, and either a self-declaration under Rule 89(2)(l) or a certificate under Rule 89(2)(m) of the CGST Rules, depending on the refund amount.