Z Power Impex PVT. LTD vs. Commissioner Of Customs(Export) And Others

Held

The High Court disposed of the writ petition by directing the Commissioner of Customs (Export) and the Assistant Commissioner, Central GST Division, Derabassi-II, to consider and decide the petitioner's claim for interest on the delayed refund within a period of six weeks from the date of the order. If the petitioner's claim for interest is accepted, the consequential benefits are to be released to the petitioner within a further period of one week thereafter, in accordance with the law. The decision taken by the authorities is to be communicated to the petitioner forthwith. The Court did not decide on the merits of the interest claim itself but mandated a timely decision by the concerned authorities.

Facts

The petitioner, Z Power Impex Pvt. Ltd., filed a writ petition before the High Court of Punjab and Haryana at Chandigarh. The petitioner asserted that a refund of Integrated Goods & Services Tax (IGST) amounting to Rs. 3,05,07,930/- was granted, but beyond the legally permissible period. Consequently, the petitioner claimed entitlement to interest on this delayed refund as per Section 56 of the Central Goods and Services Tax Act, 2017. The respondents, represented by the Commissioner of Customs (Export) and the Assistant Commissioner, Central GST Division, stated that the matter of interest was pending with the Competent Authority, noting that the refund was system-generated and no formal order regarding interest had been passed.

Key Issues

1. Whether the petitioner is entitled to interest on the delayed refund of IGST amounting to Rs. 3,05,07,930/-, as per Section 56 of the Central Goods and Services Tax Act, 2017? The petitioner argued that they are legally entitled to interest on the IGST refund due to the delay in its disbursement, citing Section 56 of the CGST Act, 2017. The petitioner contended that the refund, though granted, was beyond the period permissible by law, thus triggering the provision for interest. The respondents, on the other hand, submitted that the issue of interest is under consideration by the Competent Authority. They highlighted that the refund was a system-generated process and no formal order concerning interest had been issued. The respondents did not explicitly contest the petitioner's claim for interest on legal grounds but rather indicated that the matter was still being processed.