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2022 (4) TMI 980 - SC - GSTGrant of interest / compensation for delayed Refund of unutilized input tax credit - Rate of interest - HC awarded 9% instead of 6% applying the proviso to section 56 - zero rated supply - export of goods - Section 54 r.w.section 56 of the CGST Act - HELD THAT:- A registered person making export of goods outside India, is entitled in terms of Section 16 of the IGST Act to claim refund of either unutilized input tax credit of export of goods under bond or letter of undertaking or refund of integrated tax paid on export of goods. In terms of Section 20 of the IGST Act, any claim for refund is to be governed by the provisions of the CGST Act which would apply mutatis mutandis as if they were enacted in the IGST Act. The application for refund, therefore, is required to be preferred in accordance with Section 54 of the CGST Act. According to Section 56 of the CGST Act, if an applicant is not refunded any tax ordered to be refunded by the Proper Officer under Section 54(5) within 60 days from the receipt of the application, interest at such rate not exceeding 6 per cent would become payable after the expiry of 60 days from the date of receipt of application till the date of refund of such tax. The proviso to said Section prescribes that where any claim of refund arises from an order passed by an Adjudicating Authority or Appellate Authority or Appellate Tribunal or Court and if the same is not refunded within 60 days from the date of receipt of an application filed consequent to such an order, the rate of interest payable would be 9 per cent. The instant cases have not arisen from any order passed by an Adjudicating Authority or Appellate Authority or Appellate Tribunal or Court and the cases are strictly within the scope of the principal provision of Section 56 and not under the proviso thereof. In light of these provisions, the question which arises for consideration is whether the High Court was justified in awarding interest at the rate of 9 per cent per annum. In GODAVARI SUGAR MILLS LTD. VERSUS STATE OF MAHARASHTRA & ORS. [2013 (6) TMI 23 - SUPREME COURT], a bench of two Judges of this Court considered the question whether interest on the compensation amount at the rate of 9 per cent per annum could be awarded when the terms of Section 6 of the Maharashtra Agriculture Lands (Ceiling of Holdings) Act, 1961 prescribed payment of interest only at the rate of 3 per cent per annum. Coming back to the present cases, the relevant provision has prescribed rate of interest at 6 per cent where the case for refund is governed by the principal provision of Section 56 of the CGST Act. As has been clarified by this Court in GODAVARI SUGAR MILLS LTD. VERSUS STATE OF MAHARASHTRA & ORS. [2013 (6) TMI 23 - SUPREME COURT] and MODI INDUSTRIES LIMITED AND OTHERS VERSUS COMMISSIONER OF INCOME-TAX AND ANOTHER [1995 (9) TMI 324 - SUPREME COURT] wherever a statute specifies or regulates the interest, the interest will be payable in terms of the provisions of the statute. Wherever a statute, on the other hand, is silent about the rate of interest and there is no express bar for payment of interest, any delay in paying the compensation or the amounts due, would attract award of interest at a reasonable rate on equitable grounds - It is precisely for this reason that paragraph 9 of the decision in Godavari Sugar Mills Ltd. accepted the submission made by the learned counsel for the respondents and confined the rate of interest to the prescription made in the statute. Since the delay in the instant case was in the region of 94 to 290 days and not so inordinate as was the case in SANDVIK ASIA LIMITED VERSUS COMMISSIONER OF INCOME-TAX AND OTHERS [2006 (1) TMI 55 - SUPREME COURT], the matter has to be seen purely in the light of the concerned statutory provisions. In terms of the principal part of Section 56 of the CGST Act, the interest would be awarded at the rate of 6 per cent. The award of interest at 9 per cent would be attracted only if the matter was covered by the proviso to the said Section 56. The High Court was in error in awarding interest at the rate exceeding 6 per cent in the instant matters. The original writ petitioners would be entitled to interest at the rate of 6 per cent per annum on amounts that they were entitled by way of refund of tax - Appeal allowed - decided in favor of appellant.
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