Alcon Laboratories (Indua) Private Limited vs. The Assistant Commissioner Of Central Tax
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Cause title — parties, addresses and appearances
ORAL ORDER
In this petition, the petitioner seeks the following prayers: "(i) To issue a writ of Mandamus, or any other writ or order, directing the Respondent to grant interest of INR 1,70,44,416/- in relation to delayed refund sanctioned for the relevant period as per the statutory provisions of S. 56 of the Central Goods and Services Act; (ii) To issue order(s), direction(s), writ(s) or any other relief(s) as this Hon'ble Court deems fit and proper in the facts and circumstances of the case and in the interest of justice; (iii) To award Costs of and incidental to this application be paid by the Respondent; (iv) Pass any other order(s) as this Hon'ble Court may deem fit and more appropriate in order to grant relief to the Petitioner."
Heard the learned counsel for the petitioner, learned counsel for the respondent and perused the material on record. HC-KAR NC: 2025:KHC:51770
Learned counsel for the petitioner submits that the claim of the petitioner for interest on delayed refund is covered by the following judgments of this Court in the cases of M/s. Siemens Technology and Services Private Limited v. State of Karnataka and others in W.P.No.12365/2025 dated 16.07.2025 and M/S LG SOFT INDIA PRIVATE LIMITED v. Union of India and others in W.P.No.2992/2023 dated 29.02.2024. 4. In the case of M/s. Siemens Technology and Services Private Limited supra, , this Court has held as under:
The petitioner is before this Court seeking for the following reliefs: "a. Issue a writ of mandamus directing Respondent No.2 to credit the refund amounting to Rs.1,82,06,402/- as sanctioned vide Refund Sanctioned Orders No.0250103781119 dated 16.3.2020 (Annexure-A), No.0250103761119 dated 16.3.2020 (Annexure-A1) and No.025010379119 dated 16.3.2020 (Annexure- A2) to the Petitioner's bank account; b. Direct the Respondent No.2 to credit applicable interest under Section 56 of the CGST Act that is to be calculated from 24.9.2019 till the date the amount is credited to the bank account of the Petitioner; HC-KAR NC: 2025:KHC:51770 c. Grant such other orders or direction as deemed fit by this Hon'ble Court in the facts and circumstances of the case."
The grievance of the petitioner initially when it approached this Court was that despite the refund orders dated 16.03.2023 at Annexures - A1 and A2, the refund was not processed and paid to the petitioner. 3. 4. 5. 6. 3. During the pendency of the above matter, respondent No.4 submits that the said refund has been made on 14.07.2025 and as such the obligation of respondent No.4 has been complied. 7. 8. 9. 10. 11. 12. 4. The submission of Sri.Arvind V. Chavan, the learned counsel for respondent No.4 is also that insofar as interest is concerned until a specific order is received from respondent No.2 as regards the requirement to make payment of interest, respondent No.4 would be unable to process, since the refund is on account of respondent No.2. 13. 14. 15. 16. 17. 18. 5. Having perused the documents, it is clear that respondent No.2 had passed orders on 16.03.2020 for refund of the amount as per Annexure - A, A1, A2, which is not processed by respondent No.4 until the above petition is filed. Orders having been passed by respondent No.2 on 16.03.2020. The same is confirmed to have been received by respondent No.4 immediately thereafter. It was but required for respondent No.4 to have made payment of the amount at that time itself. If HC-KAR NC: 2025:KHC:51770 such payment had been made in the year 2020, there would be no requirements to make payment of any interest. It is on account of non-processing of the refund orders by respondent No.4 that the said refund amount continues to bear interest in terms of Section 56 of the Central Goods and Services Tax Act, 2017 (CGST Act ), which would be required to be paid. It cannot now be contented by respondent No.4 that respondent No.2 has to pass a fresh order for making payment of interest on the delay which has been caused by respondent No.4. 19. 20. 21. 6. It is for respondent No.4 by itself to have made payment of the interest without even having made the above submission before this Court. As such, I pass the following: ORDER i). The Writ Petition is partly allowed; and ii) Respondent No.4 is directed to make payment with interest on the refunded amount to the petitioner calculated from 16.03.2020, in terms of Section 56 of CGST Act, within a period of four weeks from the date of receipt of a copy of this order."
In the case of M/S LG SOFT INDIA PRIVATE LIMITED, this Court has held as under:
"In this petition, the petitioner is seeking for the following reliefs: HC-KAR NC: 2025:KHC:51770 "i. To issue writ of mandamus and /or any other appropriate writ (s) directing the Respondent No. 2 to accept petitioner's claim for interest on refund received belatedly and direct Respondent No.2 to adjudicate the matter following due procedure to grant such interest according to section 11BB of the central excise act, 1944. ii. To issue order(s), direction(s), writ(s) or any other relief(s) as this Hon'ble Court deems fit and proper in the facts and circumstances of the case and in the interest of justice.
iii. To award cost of this petition.
iv. Pass any other order or give any other direction as this Hon'ble Court deems fit and appropriate in the circumstances of the case."
Heard learned Senior Counsel appearing for the petitioner and learned counsel appearing for the respondent-Revenue Department. Perused the material on record.
In addition to reiterating the various contentions urged in the petition and referring to the material on record, learned Senior Counsel appearing for the petitioner invited the attention to the application dated 17.01.2022 submitted by the petitioner for refund of interest on delayed receipt of Service Tax refund, for the period commencing from May, 2008 up to June, 2017 as enumerated in Annexure-A series (colly). It is submitted that as per Section 11 BB of Central Excise Act, 1944 (hereinafter referred to as 'Act') the petitioner would be entitled for refund of interest granted in his favour upon expiry of 90 days from the date of submission of the application, if the refund is not made back to the petitioner within the said period i.e. 90 days. It is HC-KAR NC: 2025:KHC:51770 submitted that as can been seen from the details furnished at Annexure-B dated 25.04.2022, the petitioner submitted applications on various dates, mentioned therein and since refund has not been made within a 90 days from the date of submission of the application, the petitioner would be entitled for interest on the delayed refund which has not been paid by the respondents to the petitioner and as such, the petitioner was constrained to submit the aforesaid application to the respondents.
Learned Senior Counsel appearing for the petitioner pointed out that, instead of granting interest on delayed refund, the respondents have issued Communication vide Annexure-B dated 25.04.2022 erroneously stating that question of interest to be sanctioned will be dealt during the adjudication proceedings and any grievance has to be ventilated by preferring appropriate appeal. In this context, learned Senior Counsel invited my attention to the said Communication dated 25.04.2022 in order to point out that, undisputedly, the relevant period for which the petitioner is entitled for refund would expire on June, 2017 and adjudication proceedings in respect of the period commencing from May, 2008 to June, 2017 would necessarily have to be initiated within a period of one year and maximum extended period of four years thereafter, in terms of Section 73 of the Finance Act, 1994 and the said period having undoubtedly expired as on the date of filing of the application, the question of refusing interest on delayed refund payment is erroneous and the same deserves to be set aside. It is also submitted that, upon receipt of the said HC-KAR NC: 2025:KHC:51770 Communication at Annexure-B, dated 25.04.2022, the petitioner submitted reply dated 15.06.2022 giving details and particulars as to entitlement of interest in terms of Section 11BB of the Act and since the respondents did not grant said interest on the delayed refund, the petitioner is before this Court by way of filing the present petition.
Learned counsel for the respondents does not dispute that the refund has already been granted in favour of the petitioner. However, various other contentions urged on behalf of the petitioner are disputed and it is submitted that, there is no merit in the petition and accordingly, sought for dismissal of the petition.
As rightly contended by the learned Senior Counsel appearing for the petitioner, a perusal of the material on record, comprising of the details of the refund orders and refund payments made in favour of the petitioner as enumerated in Annexure-C clearly indicate that, the petitioner would be entitled for interest for delayed refund in terms of Section 11 BB of the Act. The reasons assigned by the respondents in refusing grant of interest in Annexure-B dated 25.04.2022 is clearly erroneous in as much as adjudication proceedings have not been initiated against the petitioner as borne out from the material on record even till today. Under these circumstances, there is absolutely no impediment to direct the respondents to grant applicable interest on delayed refund in terms of Section 11 BB of the Act in favour of the petitioner. However, in order to grant an opportunity to the concerned respondent for the limited purpose to verify the calculation of quantum of interest on HC-KAR NC: 2025:KHC:51770 the delayed refund as clamed by the petitioner, I deem it just and appropriate to set aside Annexure-B dated 25.04.2022 and direct the concerned respondent to grant interest on the refund as sought for in Annexure-C dated 15.06.2022 in favour of the petitioner after making due verification and in accordance with law within a stipulated time frame. In the result, I pass the following: ORDER
i) Writ petition is hereby allowed;
ii) The impugned communication at Annexure-C dated 25.04.2022 issued by the respondent No.2 is hereby quashed.
iii) The respondents are directed to grant/ pay interest on delayed refund of the petitioners as sought for in Annexure-C dated 15.06.2022 after due verification as expeditiously as possible and at any rate within a period of two months from today."
Per contra, learned counsel for the respondents submits that the respondents would consider the claim of the petitioner for interest on delayed refund in accordance with law.
In view of the aforesaid facts and circumstances, the respondent is directed to consider the claim of the petitioner for grant of interest on delayed refund in accordance with law, bearing in mind the aforesaid judgments and to take appropriate decision / HC-KAR NC: 2025:KHC:51770 pass appropriate orders within a period of eight (8) weeks from the date of receipt of a copy of this order. (S.R.KRISHNA KUMAR) JUDGE SJK List No.: 2 Sl No.: 8
Reproduced from the public record of the Karnataka High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.