Batra Enterprises vs. Commissioner Of Customs( Drawback) & Anr.
Held
The Court held that the respondent had not fully processed the petitioner's refund claim as per the earlier statement. Specifically, the interest payable to the petitioner was calculated only until September 12, 2022, instead of the actual date of payment, December 8, 2022. The Court directed the respondent to calculate the further interest payable from September 12, 2022, until December 8, 2022, and remit this amount to the petitioner within two weeks. The ratio decidendi is that interest on a refund must be paid until the actual date of payment, especially when a commitment to grant interest has been made and noted by the court, and the processing of the refund is delayed beyond the date of such commitment.
Facts
The petitioner, Batra Enterprises, filed a writ petition seeking a refund. On September 12, 2022, the respondent, Commissioner of Customs (Drawback) & Anr., stated that the refund would be granted along with interest as per Section 56 of the Central GST Act, 2017, read with Rule 20 of the Central GST Rules, 2017. The writ petition was disposed of based on this statement. However, the petitioner's refund claim was not fully processed. Subsequently, it was brought to the Court's attention that while the tax and interest had been processed, the interest was calculated only until September 12, 2022, instead of the actual payment date of December 8, 2022.
Key Issues
1. Whether the respondent has correctly calculated the interest payable on the refund amount in accordance with Section 56 of the Central GST Act, 2017, and Rule 20 of the Central GST Rules, 2017? The petitioner argued that the interest calculation was incomplete, as it was granted only until September 12, 2022, whereas the refund was paid on December 8, 2022. The respondent's contention was not explicitly recorded in the judgment regarding the specific calculation dispute, but their earlier statement indicated an intention to grant interest. The core issue revolves around the period for which interest is due on a refund when a statement regarding its grant is made in court.
Sections Cited
Section 56, Rule 20
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Cause title — parties, addresses and appearances
O R D E R % 16.12.2022
On 12.09.2022, the learned counsel appearing on behalf of the respondent had made a statement to the effect that the refund would be granted along with interest, in terms of Section 56 of the Central GST Act, 2017 read with Rule 20 of the Central GST Rules, 2017. The said statement was noted and the writ petition was disposed of.
Notwithstanding the same, the petitioner’s request for refund had not been processed in entirety.
This Court is now informed that the petitioner’s claim for refund of tax and interest has been processed. However, the interest has been granted only till 12.09.2022 instead of 08.12.2022. 4. The respondent shall calculate further interest payable till the date of payment of refund (08.12.2022) and remit the same to the petitioner within a period of two weeks from today. T
The judgment continues below.
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