M/S. Manibhadra Impex vs. The Union Of INDIA Through The Secretary, Ministry Of Finance, Dept. Of Revenue And Ors

Held

The Court held that the interest of justice would be served by allowing the Petitioner to make a representation on the issue of interest. The concerned Respondent authority was directed to consider this representation in accordance with the law, after providing the Petitioner an opportunity to be heard. The Court emphasized that the decision on interest must be made on merits, without being influenced by the stand taken in the affidavit-in-reply, which was admittedly made without hearing the Petitioner. The Court noted that all contentions of both parties on merits were left open as they were not examining them. The Petitioner was granted the liberty to take appropriate proceedings if aggrieved by the subsequent decision on interest. The Court directed the Respondent to dispose of the representation within two months of its receipt, passing a reasoned order and communicating it to the Petitioner.

Facts

The Petitioner, M/s. Manibhadra Impex, sought a refund of Rs. 14,33,067/- along with interest for delayed refund. During the pendency of the writ petition before the Bombay High Court, the Respondent, Assistant Commissioner of CGST and C.Ex, Raigad Commissionerate, processed a refund of Rs. 14,33,067/-. However, no interest was paid on this refund. The Respondent filed an affidavit justifying the non-payment of interest, which the Petitioner disputed. The Petitioner contended that they had not been heard on the issue of interest and no formal order declining interest had been passed.

Key Issues

1. Whether the Petitioner is entitled to interest on the refund of Rs. 14,33,067/-, and if so, what is the applicable rate and period for such interest, under the provisions of the Central Goods and Services Tax Act, 2017 (CGST Act)? The Petitioner argued that they have not been afforded an opportunity to be heard on the issue of interest and that no formal order denying interest has been passed. They contended that the Respondent's stand in the affidavit-in-reply, justifying non-payment of interest, was taken without hearing the Petitioner or considering their version. The Petitioner also indicated that they would make a representation on the issue of interest within 10 days. The Respondent argued that the refund was made after the Petitioner was compelled to file a writ petition and after considerable delay. However, the Respondent's counsel also pointed out that the refund was made within 60 days of the application for refund, a point disputed by the Petitioner.