Savista Global Solutions Private Limited vs. Union Of INDIA And 5 Others

Held

The Court held that the petitioner was entitled to the refund of Rs. 1,28,50,535/- and interest thereon. The Court found that Rule 97A of the CGST Rules, 2017, explicitly permitted manual filing of applications, notwithstanding the general requirement for electronic filing. This rule was introduced to address procedural issues arising from the GST regime's introduction. The Court reasoned that Circular No. 125/44/2019-GST, issued on 18.11.2019, could not override the statutory Rule 97A, especially since the circular was issued after the petitioner's application was filed on 27.09.2019. The insistence by respondent no. 5 on online uploading was deemed an "eye wash" as the application had already been processed and an order passed by respondent no. 6. The Court concluded that the respondents could not escape the liability for interest under Section 56 of the CGST Act, 2017, which accrued from 27.11.2019 onwards due to the delay in payment. The Court directed respondent no. 6 to refund the entire amount along with interest at 6% from 27.11.2019 until the date of demand draft issuance, with payment to be made within one month. Inter se disputes between respondents were left for them to resolve.

Facts

The petitioner, Savista Global Solutions Private Limited (formerly Nthrive Global Solutions Private Limited), sought a writ of mandamus directing respondent no. 6 to refund Rs. 1,28,50,535/-, which became due under an order dated 06.01.2020 for the month of July 2019. The petitioner had filed a manual refund application on 27.09.2019 under Rule 97A of the CGST Rules, 2017. Although the refund order was passed on 06.01.2020, beyond the statutory 60-day period stipulated in Section 54(7) of the CGST Act, 2017, neither the refund amount nor any interest has been paid to the petitioner. The respondents were given an opportunity to pay the amount or explain their conduct, but neither occurred. The court noted that the refund amount and the delay in processing were undisputed.

Key Issues

1. Whether the petitioner is entitled to a refund of Rs. 1,28,50,535/- for the month of July 2019, and if so, whether the respondents are liable to pay interest thereon under Section 56 of the CGST Act, 2017, considering the manual filing of the refund application under Rule 97A of the CGST Rules, 2017, and the delay in processing beyond the 60-day period stipulated in Section 54(7) of the CGST Act, 2017. Petitioner's arguments: The petitioner contended that an admitted refund amount was due and that interest was payable under Section 56 of the CGST Act, 2017, due to the delay in processing the refund application filed manually under Rule 97A, which was permissible. They argued that the subsequent Circular No. 125/44/2019-GST could not override Rule 97A and was issued after the application was filed. Respondents' arguments: Respondent no. 6 claimed it approved the refund and forwarded the file for payment. Respondent no. 5 argued that since the application and forwarding were in physical mode, it could not be processed as online mode was mandatory after the GST portal's activation on 26.09.2019. They cited communications dated 20.07.2020 and 27.08.2020 and insisted on online compliance for processing the refund and interest.