Microsoft Global Services Center (INDIA) PVT LTD vs. State Of Telangana
Original PDF →Facts
Petitioners claimed refund of unutilized Input Tax Credit (ITC). After initial rejection and subsequent appeals being allowed, petitioners sought interest on the delayed refund. The department rejected the interest claims, leading to the present writ petitions.
Held
The Court held that interest on delayed refunds under Section 56 of the CGST Act is payable automatically from the expiry of sixty days of the refund application till the date of actual payment. The Court also clarified that subsequent applications for refund after appellate orders do not require fresh adjudication and are merely for disbursal.
Key Issues
Whether interest on delayed refunds under Section 56 of the CGST Act is payable automatically, and how it should be calculated, especially after appellate orders.
Sections Cited
Section 56, Section 54, Rule 90(3)
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
The Court made the following: ORDER Petition under Article 226 of the constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a writ, order or direction particularly one in the nature of a wRlr oF tvANDAlvus to - (a) declare that interest on delayed refunds under Section 56 of the cGST Act is automatic and payable to the petitioner from the date of the originai filing of the refund application till the date of actual payment of the refund without making any application to this effect. (b) direct the Respondents, their servants, agents or representatives to forthwith grant and sanction interest on delayed refund to the tune of Rs..14,8-l ,37 ,141 , from the date of the original filing of the refund application till the date of actual payment of the refund, (c) to read down Rule 90(3) of the CGST Rutes to the extent it treats a revised refund application (filed pursuant to a deficiency memo) as fresh application as arbitrary, illegal and ultra vires the provisions of Section 56 of the CGST Act lA NO: 1 OF 2023 w.P.Nos.8869 and 887 | of 2023 THE HON'BLE SRI JUSTICE P.SAM KOSHY AND THE HON'BLE SRI JUSTICE N.TUKARAMJI WRIT PETITION Nos.8869 and 8871 of 2O23 COMMON ORDER (per Hon'ble Sn Justtce P.SAM KosEq These two writ petitions have been fried by the two establishments where the question of law needs adjudication is, whether the petitioners herein are entitled for interest under Section 54 of the Central Gcods and Services Ta;< Act, 2Al7 (hereinafter referred to as 'CGST Act, 2Ol7'l on the delayed gr:anting of refund of Input Tax Credit (for short, 'lTC') claimed under Section 54 ofthe CGST Act, 2017. 2. Heard Mr. Karan Talwar, learned counsel for the petitioner, Mr. Swaroop Oorilla, learned Special Government Pleader for State tax for the respondent Nos. 1,2 and 3; and Mr. Gadi Praveen Kumar, learned Deputy Solicitor General of India for the respondent No.4. 3. The broad facts, for con.-,enience .,vithout referring to the dates as the issues are in common, are that, the petitioners had filed a refund ciaim petition before the respondents ciaiming for refund of the unutilized ITC. Upon raising the said claim, the resLqq-:s issued a deficiency memo to which the petitioners 3 1 I .*l
:FP PSK, J & NTR, W.P.Nos.8869 and 8871 o. ,O23 promptly replied. Subsequently, show causes nolices were issued to which also the petitioners replied ald frnally orders were passed rejecting the refund claims. The rejection of the refund claims was subjected to challenge in the appeals and the appeais hled by the petitioners were substantially allowed and refund amounts were also disbursed.
Later on the petitioners moved alplications with the respondents requesting them for gralt of interest on the amount refunded by them for the period it was withheld by the Department resulting in delayed releasing. In spite of persistent efforts by the petitioners, the interest on the delayed refunded amount was not granted. The request hnally stood rejected by the Department vide orders dated O9.O5.2O22 and. 19.02.2023 respectively, which are under challenge in the instalt writ petitions.
It is in this factual backdrop that the question of law which needs adjudication has been framed as is reflected in the initial part of this order.
For proper understanding of the dispute, it would be more appropriate at this juncture to take note of the provision of Section 56 of the CGST Act, 2017, wlrrich for ready reference is reproduced herein und_e_r: .- -,," 4
5 PSK,J&NTR'J w.P.Nos.8869 and 8877 ot 2023 "
Interest on delaYed refunds If any tax ordered to be refunded under sub-section (5) of section 54 to aly applicaLion is not refunded within "*ry a.y= from tJle date of receipt of application under sub-sectiott (1) of that section, interest at such rale not exceeding six per cent. as may be specified in tJ.e notihcatilon issued by the Government of the recommendations of the Council shall be payable in respect of such refund [for the period of delay beyond sixty days from the date of receipt of such application ti11 the date of refund of such tax, to be computed in such manner and subjcct to such conditions and restrictions as may be prescribedl: PROVIDED that where any claim of refund arises from an order passed by an Adjudicating Authority or Appeilate AuLhoiity or Appellate Tribuna-1 or court which has attained finality and ti-re same is not refunded within sixty days from the datc of receipt of application hled consequent to such order, interest at suc,h -rate not exceeding nine per cent as may be notihed by ttLe Governmint on the rccommendations of the Council shall be payable in respect of such refund from the date immediatety after the expiry of sixty days from the date of receipt of application till the date of refund ' Explanatlon: For Lhe purposes of this section, where any o.dei of rcfund is made by an Appeilate Authority' Appellate Tribuna1 or any court against -an -order of the piope. offrc.. under sub section (5) of section 54,.the order passea by the Appellate Authority, Appellate Tribunal or ty the court shali be deemed to be an order passed under the said sub-section (5)." From plain reading of the aforesaid Section there is absolutely no ambiguity so far as the intention, object and purpose of enactment ofthesaidprovision.TheheadingofthesaidSectionitselfsays 'Interest on delayed refund' which by itself leads to the only
conclusion that can be drawn that of interest automatically accruing on the delayed refuncl made by the Department The very
6 psK, J &rriilR, W.P.fios.8869 and a877 o, ZOZ1 Section starts with the wordings that of any tax ordered to be refunded is not refunded within the stipulated period of time, interest at such rate shaII be payable on the said refund amount.
Similarly, the proviso also to the said Section clearly envisages that of any claim of refund which arises from al order passed by the Adjudicating Authority or Appellate Authority or Appellate Tribunar or for that matter any court of law a,d if the refund is not made within sixty (60) days, the said amount of refund would also carry interest at such rates notified bv the Government.
In the given factual and statutory provisions, we are of the considered opinion that the Section, the proviso and its expianation provided to the Section does not provide for any ctrcumstances or situation under which the delayed refund not attracting interest. If we also look into the provisions of Rule.94 of the CGST Rules, 2O17, the said provision also provides for certain periods which shall not be included in the period for which the interest is payable. This in other words also meals that interest on the delayed refund is automatic. As soon as.there is a delay in refund of the money to the applicant beyond the period stipulated under Section 56 or where any amount.is due and payable to the a-pplicant ulder Section 56 arid if the said amount of refund gets w.P.Nos.8869 and 8871 of 2023 delayed, the said amount sha-1i automatically be entitled to carry interest.
There can be no dispute or doubt so far as a provision of grant of interest in a particular statute is concerned. The same has to be treated as a beneltcial legislation and should be enforced non- discriminately. Since there is a specific provision under Section 56 for grant of interest only in the event of delay in making of the refund by the Department, the saiC statutory prescription carries an obligation to pay interest.
What is also required to be appreciated is that there was no reason or material available with the Department for not releasing refund amount promptiy. There was no preventive or prohibitory order or any such restrictive directions from aly Court of law in their favour from making refund within the stipulated time. In the said circumstances, non-granting of interest in such a case would amount failure to discharge statutory duty/ obligation by the refund sanctioning authority.
There is a catena of decisions of the Hon'ble Supreme Court and also practically of every High Court wherein it has been consistentiy held that in the event of there being a delay on the parl 9f the Department in making necesaaty refund as quantihed 7 ta
T PSK, J & NTR. w.P-Nos.8869 and aaTt oI tih by the Department themselves within a stipulated period or within a reasonable period of time, the said amount shall carry interest. Such decisions have been passed even under the other statutes dealing with tax.
The Gujarat High Court in the case of Saraf Natural Stone vs. Union of Indiar in paragraph Nos.22 to 25 held as under: 8 "
The posiLion of law appears to be well_settled. The provisions relating to arr interest of delayed p"V-""t of refund have becn consistently held ""- t""in'"iJ ura non-discriminatory. It is true ihat in the taxine Jatute the.principles of equity may have tittte rote to it"u, t,., at the same time, any statute in taxation mattJr stoufa also meet with the test of constitutio"rf p.oui"io.r.-- 23- The respondents have not explained in any malner the issue of delay as raised by ihe writ-appil""," tv hling any reply.
The- chart -indicating the delay referred to above speaks lor ltsell.
In the overall view of the matter, we are inclined to hold the respondents liable to pay simple i"L.."t'." tt" delayed payment at thc rate ol 9&'p.. ,rlrrr-.- fn" authority concerned shall look into the chart piovided by the writ applicalts, which is at eage_SO. en.r!""rl.._O to the writ application and calcullte tfr" "gg..g"t" amount of refund. On the aggregate amount of refund, the writ applicants ,r" ".rUUJd to O"/. ler "rr".r_ interest from the date of filing of rt e CSin_Of.-^ffr" respondents shall undertake this exercise at the eariiest and calculate the requisite amount towards the interest. l,et this exercise be undertaken -a .o-pi.i"J ;i*ri" " period of two months from the aate of .ecel.pi.f th. *.it of this order._ The requisite amount towards the interest shall be paid to the writ applicalts *itt i. " p..i.a .f 'zors 1za1 esru:so 1cu1_1 w.P.Nos.8a69 and E87l of 2O23 two months from the date of receipt of the u.rit of this order."
Similarly, the Bombay High Court also in the case of paragraph No.7 has held as under:
"
The balance claim that remains is of interest on this sum. If the statute provides that in the event, amount is not paid within a specified time, then, the Revenue will have to pay lnterest, unless and until, the Revenue was able to obtain any preventive or prohibitory order and directions. It cannot refuse to release the sum in favour of the Appellants. The Revbnue could have released the sum without prejudice to its rights and contentions and subject to the pending proceedings in this Court and equally the Tribunal."
The Bombay High Court in the case of petitioner themselves 56 of the GST Act observed as under: "Once there is delay in payment of refund within 3 months from the date of receipt of application, rigour of section l lBB sets in a;rd payment of interest on t1:e delayed refund becomes obligatory, rvhicy follo,rzs automatically; as a matter of law; 9 'zwrit Petition No.11421 of 2014 dated 19.01.2015 of the Bombay High Court 3 2021(so) G.s.r.1.269 (Bom.)
10 PSK, J & I{T.R. Ur. P.Nos.8869 and 8871 oi{r.r2 Nol-granting of interest in such a case would amount to failure to discharge statutory duty/obligation Lu^ ,fr" refund sanctioning authority;,
On the said frnding, the Bombay High Court held that the petitioner would be entitled for interest on delayed refund. The question as to whether the payment of interest would accrue from the date of the originat application or from the date the dehciencies memos were removed, the landmark decision in this is case is that of Ranbaxy Laboratories Ltd. vs Union of India+ wherein 1n paragiaph Nos. 1 1 , 13 and 1 5 dealing with the para materia provision under the Central Excise law has held as under: :1 1. +t this juncture, it would be apposite to extract a Circuiar dated 1st Ocrober 2oo2, is;;J ;; ttJ-c*".rt.at Board of Excise & Customs, New Oeiiri wlie.eln referring to its carlier Circular dated ZrJ-1"".'fCAA, whereby a direction was issued t. f, ;;;;iiluiy ro. not disposing of the refund/rebate claimJ *itfri"'tfr."" months from ttre date of receipt of .ppfl."iiorl, tn" Board has reiterated rts earlier stald on the appiicability of Section r IBB of tfre nJ-iigniircrltty, the Board has srressed that the p..ri;;;:f i"ioon 11BB of the Act are atrracted. """to-"U"Jfy ,li rrr, refund sanctioned beyond a period of three -""tfr".
We, thus find substalce in the contention of learned counsel for t}le assessee that in fact the i"".." "ilna" concluded by the decision of this Cor.t i, Un. "#ga IlPl 9r": Ltd. (supra). rn the said ""r", *rril" orsmlssrng the special leave petition filed by the ievenue and putting its seal of approval on the dlcisiorr-oi *r" Allahabad High Court, 'ti-ris Court ;;J;;;; "" under: a< o zorr 1zz:1 r.l.r. : 1s.c.; { I
1I w.P.Nos.8869 aud 8871 of 2023 "Heard both the parties. In our view ttre iaw laid down by the Rajasflral High Court succinctly in the case of J.K. Cement Works v- Assistant Commissioner of Central Excise & Customs reported in 2OO4 (I70) tr.L.T. 4 vide Para 33: 'A close reading of Section l1BB, which now governs the question relating to payment of inrerest on belated payment of interest, makes it clear that relevant date for the purpose of determining ttre liability to pay interest is not the determination under sub- scction (2) of Section 1 1E} to refund the amount to the applicant and not to be tralsferred to the Consumer Weifare Fund but the relevant date is to be determined with reference to date of application laying claim to refund- The non- payment of refund to the applicant claimart within three months from the date of such application or in the case governed by proviso to Section 118B, non-payment within three montl:rs from the date of the commencement of Section 1 lBB brings in the stal:ting point of liability to pay interest, notwithstalding thc date on whieh decision has been rendered by the competent authority as to whether the amount is to be transferred to Welfare Fund or to be paid to the applicant needs no interference."
In view of tJle above alalysis, our answer to the question formulated in para (1) supra is that the liability of the revenue to pay interest under Section t 1BB of the Act commences from the date of expiry of three months from the date of receipt of application for refund under Section 11E}(1) of the Act ald not on the expiry of the said period from the date of receipt of the application. Thus, the said decision is of no avail to the revenue."
The said principles of law has been further reiterated by the Hon'ble Supreme Court in the case of Union of tndia vs. Hamdard (Waqf) Laboratoriess and again by the Bombay High Court recently in the case of M & G Global Services Pr't. Ltd. - 2015 (333) E.L.r. 193 (S.C.) vs. Union
PSK,J&NT, TJ W-P,Nos.8869 and 8871 of d?23 of India5 wherein in paragraph Nos. 1l and. 12 it has been held as under: t2 itf ..n-s he_ld by the Apex Court in Ranbaxy (supra), a fiscal legislation has to be construed stricily ..rd o,-,. has to look merely at what is said in the relevalt provision; there isnothing to be read in; nothing io be implied; and there is no room for arty of inten-clment. The liabi.tity of the revenue to pay interest under Section 11BB of the Act commenced from the date of expiry of three months from the date of receipt of application for refund under Section 11BB(1) of the Act.
The Division Bench of this Court in Su_taraj Mazda Limited v. Union of India [2e09 1238I E.LJ. Z8r1 Eom.)] llso held that perusal of Section 11BB shows tfr"i if r-y duty recovered is found to be refundable, still the paJ.ment is not made within a period of three months from the receipt of application for refund then interest is liable to be paid. Even in that case revenue had taken the stand that the applications for refunds initially Iiled by petitioner were incomplete. The Court rejected this objections and held interest was payable on the refund. Parallraph 2 and 8 of the said judgment Su.taraj Mazda (supra) reads as under: '
ThereafLer, the petiLioner wrote leLters to the authorities clairning interest under the provisions of Section 11BB of the Central Excise Act. There was no response to those letters for a long time, but ultimately by letter dated 1-1-2OO4 the petitioner was informed that the petitioner is not entifled to payment of any interest on the refund claim under Section 11BB of the Act. Against that letter, an appeal was filed before the Commissioner, Central trxcise (Appeals). That appeal was rejected by order dated 20-12-20O5, and therefore, a revision was filed before the Joint Secretary, Government of India, Ministry of Finance, Department of Revenue. That revision has been rejected by lhe order which is impugned in this petition. That Jbint Secretary has held that the applications for refunds initially hled by the petitioner were incomplete and that those applications got completed only after the order was i 'zoz: 1:e:1 r.r.r. as 1eom.y. I I )
w.P. os.8869 aad 8871 of2023 passed in the appeal dated 30-7-1999, ancl that paymcnt of refund has been made within three rnonths thereof, and therefore, no interest is payable to the petitioner. 8, Now it wiil be necessary to see the provision of Section 1 1BB of the Act which reads as under: Section 11BB Interest on delayed refunds. - if any duty ordered to be refunded under sub-section (2) of section 11B to any applicant is not refunded within three months from the date fo receipt of application under sub-section (1) of that section, there shall be paid to that applicant interest at such rate, not below five per cent ar-rd not exceeding thirty per cent per arnum as is lor the time being hxed by the Central Government, by Notification in the Official GazetLe, on such duty irom tlte ciate immediately after the expiry of three months from the date of receipt of such application till tle date of refund of such duty: Provided that where any duty ordered to be refund6d under sub-iebtion (2) of section llB in respect of al application under sub-section [1) of that section ade before the date on which the Finance Bill, 1995 receives the assent of the President, is not refunded within three months from such date, there shall be paid to the applicart interest under this section from thc datc immediately aJter three months from such date, till lhe date of refund of such dutY. Explanation. - Where any order of refund is made by the Commissioner (Appeats), Appellate Tribunal, National Tax Tribunal or any Court against an order of the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise, under sub-section (2) of section 11B, tl e order passed by the Commissioner (Appeals), Appellate Tribunal, National Tax Tribunal or, as the case may be, by tJre court shall be deemed to be an order passed under the said sutr-seclion (2) for the purposes of this section." Perusal of the above provision shows tl-rat if any duty rccovered is found to be refundable sti1l the paymcnt is not made within a period of three months from the receipt olg;rplication for refund then inteleal is liable to \ ---t II
I 14 PSK, J & W.P.Nos.8869 and 8821 -2023 be paid. perusal of the above provision makes it clear that liability to pay interesl arises on ",,pi.yli"p.t.a of three months ,,from tl u nder su b secu; ; i', ) ff f"xl:":r ii;:' il".| i:rj::: :; reterred, to above as to how .ppfi"Jo., -rrrrf,"l s""tior, ,r 18 ]". to- be made, .th".grb;"; ;;;;;" T"i_o,r, ," ::::ig"d Lhat rhe applicarion th;i ';;" ir"j''uy rn" petrtloner under SecLion 11B calnot U"- t".rila ." ,r_, application made unrter -segtio-n rrs, li"iili;"r" p", interest after expiry of period of tf-l."" m ol"n""'rf.orn ,r," !3te-of receipt of that applicatio" "urrrroi' il""i"rri"a. Firstly there is no such n"ai"f ."".J"i rr"ifr. ,.o.. impugned and secondly_ on close examination of the order of the appetlate authonry d"r"J-;_;_i;;9 we find r]:at is cannot be sairl that th. ;;ti;""'ni.o l, *" petitioner for retund was found ,;'#';;l;";iL," ,n", it would not be termed as arl application aa all. The revisional authoritv in the order impugned has observed that the appelrate authority f.""; 6;?;;.,ii#i u"- the authorit5r was found ,r"""".rry- f* -""olii"ni"* ::T.t"ti:i. by the appeuate "uth;.ity' p"-"i"'l, *. order of the appellate algrority d""'" ;;; *"f,o* ,n", production of the certificate' ;;; ;.""'"# for establishing correlation. Correlation ;;;"*; be established by tooking at the chassis .,.,.ii.. i"r_, ,rr" duty paying document e.: "r ;,U ;;,h.;ilt"1:i;"1,ff,*" ilT" ;: r:ill:li number mentioned in the auiy p"riig"J.J,l_.", :x^::uted .at the .rime of payment of-aui, t., ?r,. U"!. ,r.," :^.:^"^T:-." evidencing paymenr of dury ,, UJi. ,r," occasrons were aJready available on .".oi.l [""rr." i, i. only on ttre basis oi ttro"" two documents that the Assistanr Commissioner h"d .".;.;;*fi;;i"_ *li *" d,utv h-as been paid on both tt. """."ior1.^11 ^*lrnr" clear that the correlation could be ;,"bli;; o]rr, ur_, lre basis of those two documents which were on reiord. A certificate was reouired to U. ",_,U-iti.a-," fru *" appeltate aurhority only ,o ".r"*"'ir,""iril',rlJ, *" duties have.be.., p.ia .t totf, *r" plr""".'*" ,i,,1 nra that.the.rrnding recorded i" th" o.d;;;;;;*"j.i", *" applications for refund made by irr" -ir"?*.".. 1.l,e." incomplete on the date of which they wire received, is not sustainable and is contrary to tl-e record and, therefore, is liable to be set aside. (Emphasis supplied) I
i5 PSK,J&NTRIJ W.P.Nos.8869 snd, 8A7l ot 2023 The Apex Court dismissed SLp {20LO (2s3t" E.L.T. A19 (S.C.)l hled by Union of lndia against this judgment of the Bombay High Court." 17 . As regards the issue whether for differing the payment of under:
"
In the evenL of defaul[.or inaction to carry out the said activities within the stipulated period, consequences like pal,rnent of interest are stipulated in Section 56 of CGST/DGST Act. a. Admittedly, till date the petitioner,s refund application dated 4th November, 2O19 has not been processed. As neither any acknowledgement in FORM GST RFD-O2 has been issued nor any deficiency memo has been issued in RFD-O3 within timeline of fifteen days, the refund application would be presumed to be complete in all respects in accordance with sub-rule (2), (3) ar-rd (4) of Rule 89 of CGST/DGST Rutes.
To allow the respondent to issue a dehciency memo today would amount to enabling the Respondent to process the refund application beyond t.lle statutory timelines as provided under RuIe 90 of the CGST Rules, referred above. This could then also be construed as rejection of the petitioner's initial application for refund as the pelitioner would thereaJter have to file a fresh refund application after rectifying the alleged dehciencies. This would not only delay the petit right to seek refund, but also impair petitioner,s r ioner's ight to 'zozo 1:s1 e.s.r.r. :as 1oet.1 '4't \ -_.-
L6 PSK, J 66 NTJL W.P.Nos.8869 end 887I of 5-2 under: '
The petitioner's entitlement for interest cannot be defeated merely because the proper officer passed art incorrect order, which is subsequently rectilied in the appellate proceedings.
The object of providing payment of interest aftei the expiry of sixty days from the date of the refund application is to ensure tlat a taxpayer is adequately compensated for denial of the funds that were legitimately due to it after accounting for a reasonablc period of sixty days for processing its claim. The right of a taxpayer to receive such compensation woulcl be severally diluted if tl-re reference to the date of receipt of application under Section 54(l) of the CGST Act, in Section 56 of the CGST Act is construed to mean the date of an application for refund filed subsequently - that is, after the first application for refund is rejected in whole or in part - pursuant to the orders passed by the appellate fora.
We are of the view that on a plain reading of the main provisions of Section 56 of the CGST Ait, a taxpayer wouid be entitled to interest from the date immediately after the expiry of sixt5r days from the receipt of tlee frrst application under Section S4(1) of the CGST Act, which is accompariied by the documents as specified under Section 54(4) of the CGST Act read with Rule 89 of the Rules.
We are also unable to accept that the proviso to Section 56 of t].e CGST Act in arly manner dilutes the 'zoz:1rr1tl.l sss - DELHI HIGH couRT I I \ l
l7 PSK,J&NTR'J W.P.Nos.8869 and a871 of 2023 right of a taxpayer to receive interest under the marn provisions of Section 56 of the CGST Act. It is well iettled that a provsio to a clause must be read in the context of the main clause and not as a separate or an independent clause. The main clause and the proviso must be read as a whole. 33. it is clear from a plain reading of Section 56 of the CGST Act Lhat whereas the main provision of Section 56 of the CGST Act refers to the rate of interest applicable on the amount of refund due, which remains unpaid evcn after skty days from the date of appiication for refund; the proviso provides for an increased rate of interest for the period that commences from the date immediatety after the expiry of sixty days from the date 'of application which is hled pursuant to the claim for refund attaining finality in appellate proceedings. Section 56 of the CGST Act, thus, works as ioilor.r,s. The applicant claiming a refund is entitled to interest at the rate of 67o per annum from a date immediately after the expiry of sixty days from making a-n appLication under Section 5a(1) of the CGST Act' Ho*e,rlr, if a person's claim is denied (or if granted is not accepted by the Revenue) and the order of the Adjudicating Authority is carried in appeal to the Appellate Authority or to ttte Appellate Tribunal/High Clurt, which finJiy upholds t]le claim, the applicant may have to hle a second application to secure the refund. If such application for refund filed by the person consequent to succeeding before the Appellate Authoiity, Appellate Tribunal or court, is not processed withiin a period of sixty days of ftling the application, the applicarrt would be entit-led to a higher rate of 9-o/o pet -rr- commencing from the date immediately after the expiry of sixty days of his application frled pursuant to thi appellate orders. However, this does not mean that the rate of 60/o per annum is not payable for the period commencing from the date immediately after expiry of sixty days fiom his frrst application till sixty days after frling of his seconci application pursuant to the appellate ordeis. In alother words, the proviso merely enhalces ttre inteiest payable to a person for the period commencing from the date immediately after sixty days from the date of his application liled pursuant to its entitlement to refund claim attaining hnality'
The applications fo1 refund filed pursuant to orders passed by the Appellate Authority, do not invite any iresh erdjudication. fne said applications are mefuSfto l I
l8 PSK,J&-TR,J 9/.P.Nos.8869 er.d BgTt 6:2023 implement the orders already passed. Se nsu stricto, such application is only for the purposes of convenience and to retrigger ttre processing of tJ:e refund claimed. It is obvious that the petitioner's claim for refund caanot be_ subjected to repeated rounds of adjudication by the Adjudicating Authority. Once al application for rJTund under Seclion 54(1) of the CGST Act has been filed, the same requires to be carried to its logical conclusion. If the said claim is denied by the Adjudicating Authority 3rrd. the applicant prevails before the Appellate Authority, the order of the Appellate Auth;ri& is required to be implemented. However, in one "".r"", th" subsequent application filed by a person pursuant to succeeding before the Appellate Authority, is solely for the_ purposes of giving a nudge to the process of disbursal of the refund claim and for the proper officer to determine and disburse the interest ^" piy.tl"." L9. The said judgment of the Delhi High Court also deals with the objections of the State Counsel referring to the explanation to Section 56 so far as the interest being calculated from the decision in the appeal proceedings even otherwise. The said contention of the State Counsel would not be sustainable for the reason that what is intended by the explanation is that the moment tl.e Appellate Authority or the Tribunal or the Court as the case may be decides the issue of refund, t1le order so passed shall be deemed to have been passed as under sub-section (5) of Section 54. Which in other words mears the said order by the Appeilate Authorit5z, Tribunal or the Court of law as t_he case may be for the purpose of its enforceability has be treated as if it is an order under sub_ section (5) of section 54 and as such interest would be calculated ) ; I
19 PSK, J & NT w.P.Nos.8869 and,8871 of 2023 immediately after sixty (60) days within which the payment of refund has to be made starts.
For all the a-foresaid reasons, we are of the considered opinion that both these writ petitions therefore deserve to be aliowed and are accordingly aliowed. The respondents are directed to forthwith take steps for payment of interest on the delayed refund of ITC released to the petitioners in terrns of sub-section (1) of Section 56 arrd the proviso thereto. 21, No order as to costs.
Consequcntly, miscellaneous applications pending if any, shall stand closed. JS. SARASW HI ASSISTANT REGIS //// SECTION OFFICER One Fair Copy to the Hon'ble Sri Justice P.SAM KOSHY (For His Lordships Kind Perusal) One Fair Copy to the Hon'ble Sri Justice N. TUKARAMJI (For His Lordships Kind Perusal) The Deputy Commissioner, (ST) (FAC) Office of the Joint Commissioner (ST), Hyderabad (Rural) Division,6th Floor, GaganVihar, Nampally, Hyderabad - 500001. To,
-+- 2 The Commissioner of State Taxes,C.T- Complex, Nampally, State of Telangana, Hyderabad 500 001 . 3, The Princrpal Secretary to Governmenl, State of Telangana, Revenue (CT-ll) Department, Secretariat. Hyderabad.
The Secretary ,Union of India, Department of Revenue, Ministry of Finance, Government of lndia, Central Secretariat, North Block, New Delhi - 110 001. 5. The Joint Commissioner, (State Tax), Hyderabad Rural Division, V Floor, GaganVihar, Opposite Gandhi Bhavan, MJ Road Nampally, Hyderabad- 500001, Ielangana 6. 11.LR Copies.
The Under Secretary, Union of lndia fVinistry of Law, Justice and Company Affairs, New Delhi.
The Secretary, Telangana Advocates Association Library, High Court Buildings, Hyderabad.
Two CCs to GP FOR COA/IVERCIAL TAX ,High Court for the State of Telangana, at Hyderabad [OUT] 'l0.One CC to SRl. GADI PRAVEEN KUMAR , DY. SOLICITOR GENERAL OF INDrA [OPUCI 1'l.One CC to SRl. KARAN TALWAR,Advocate [OPUC]
Two CD Copies BIM, GJP $ *l 1
:-=-,__:_ \ HIGH COURT DATED:2010312024 ( ()t( THE S14 arcHEo l !) 0 5 lu[ 2024 oi','" \\r'\,. 9e s, l' o \\ { i COMMON ORDER WP.No.8869 AND 8871 OF 2023 ALLOWING BOTH THE WRITPETITIONS i WITHOUT COSTS
Reproduced from the public record of the Telangana High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.