Ess Aar Automotive PVT. LTD. vs. Union Of INDIA & Ors.

Held

The Court disposed of the writ petition with specific directions. Respondent No. 2 was directed to pay Rs. 17,59,780 within one week. Respondents No. 3 and 4 were also directed to pay Rs. 17,59,780 within one week. The petitioner was directed to file a comprehensive application manually with Respondent No. 2 seeking payment of outstanding interest within one week. Respondent No. 2 was then directed to dispose of this application by way of a reasoned order within two weeks thereafter. The Court did not explicitly decide on the entitlement to interest in this order, but rather directed the process for seeking and deciding such claims.

Facts

The petitioner, ESS Aar Automotive Pvt. Ltd., filed a writ petition seeking directions for the immediate credit of the sanctioned Central Goods and Services Tax (CGST) component of a provisional refund and the refund of the balance amount. A provisional refund order for Rs. 3,16,76,048 (CGST Rs. 1,58,38,024 + SGST Rs. 1,58,38,024) was sanctioned on November 27, 2019, representing 90% of the total claim. A revised payment advice was issued on December 5, 2019, and the SGST component was credited. However, the CGST component of Rs. 1,58,38,024 and the remaining 10% of the refund (Rs. 35,19,560) along with interest had not been paid. The petitioner later admitted that the CGST component of Rs. 1,58,38,024 had been released. The respondent indicated that advice to pay 5% (Rs. 17,59,780) was issued on June 25, 2020, and the balance 5% also needed to be released.

Key Issues

1. Whether the petitioner is entitled to the immediate credit of the sanctioned Central Goods and Services Tax (CGST) component of the provisional refund and the balance refund amount, including interest, as per the provisions of the CGST Act and Rules. Petitioner's Contention: The petitioner argued that the CGST component of the provisional refund, along with interest, and the remaining 10% of the refund with interest, had not been paid despite being sanctioned. They sought directions for immediate payment of these amounts and interest as per Section 56 and Rule 94, and Circular No. 125/44/2019 GST. Respondents' Contention: Respondent No. 2 stated that advice to pay 5% of the refund amount (Rs. 17,59,780) was issued on June 25, 2020, and admitted that the balance 5% also needed to be released by them. No specific arguments were recorded for the other respondents.