M/S Saraf Natural Stone vs. Union Of INDIA
Held
The Court held that the petitioners are entitled to simple interest on the delayed payment of refunds. The Court found that the respondents failed to provide any explanation for the significant delays in processing the refund claims, as evidenced by the chart provided by the petitioners. The Court referred to its previous decisions, including the one in Gujarat Fluoro Chemicals, which affirmed the principle of awarding compensation for delays in receiving monies due. The Court defined 'compensation' broadly as recompense for loss or injury. The Court directed the concerned authority to calculate the aggregate refund amount based on the chart provided and award simple interest at the rate of 9% per annum from the date of filing of the GSTR-03 until the date of refund. This exercise was to be completed within two months from the receipt of the order, and the interest amount was to be paid within the same period.
Facts
The petitioners, M/s Saraf Natural Stone and its partner, filed a writ application challenging the delay in granting refunds for integrated tax paid on exports. They contended that under Section 16 of the IGST Act, 2017, read with Section 54 of the CGST Act, 2017, and relevant rules (Rules 90, 91, 96 of CGST Rules), they are entitled to refunds, including provisional refunds within seven days of acknowledgment, and interest on delayed refunds as per Section 56 of the CGST Act. The petitioners provided a chart detailing the significant delays in receiving their refunds, with some delays extending to 290 days. The respondents did not file a reply to explain the delay.
Key Issues
1. Whether the petitioners are entitled to compensation and interest for the delay in granting refunds of integrated tax paid on exports, as per the provisions of the IGST Act, 2017, and CGST Act, 2017? (Question of law) Petitioner's Arguments: The petitioners argued that Sections 16 and 20 of the IGST Act, read with Section 54 and 56 of the CGST Act and Rules 90, 91, and 96 of the CGST Rules, entitle them to timely refunds and interest for delays. They relied on the statutory provisions that mandate timely processing of refunds and provide for interest on delayed payments. They presented a chart demonstrating substantial delays, arguing that such delays constitute a loss for which compensation is due. They cited the definition of 'compensation' from P. Ramanatha Aiyar's Advanced Law Lexicon to support their claim for recompense for the injury suffered due to the delay. Revenue's Arguments: The judgment notes that the respondents did not file a reply and therefore did not present any arguments against the petitioners' claims.
Sections Cited
Section 16, Section 20, Section 54, Section 56, Rule 90, Rule 91, Rule 96
AI-generated summary — verify with the full judgment below
C/SCA/15925/2018 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 15925 of 2018
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE J.B.PARDIWALA
and HONOURABLE MR.JUSTICE A.C. RAO
========================================================== 1 Whether Reporters of Local Papers may be allowed to see the judgment ? YES 2 To be referred to the Reporter or not ? NO 3 Whether their Lordships wish to see the fair copy of the judgment ? NO 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India or any order made thereunder ? NO ========================================================== M/S SARAF NATURAL STONE Versus UNION OF INDIA ========================================================== Appearance: MR VINAY SHRAFF, ADVOCATE WITH MR.VISHAL J DAVE(6515) for the Petitioner(s) No. 1,2 MR VINAY SHRAFF, ADVOCATE WITH NIPUN SINGHVI(9653) for the Petitioner(s) No. 1,2 MR PY DIVYESHVAR(2482) for the Respondent(s) No. 2 NOTICE SERVED BY DS(5) for the Respondent(s) No. 1 VIRAL K SHA
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