TMI Blog2019 (7) TMI 1282X X X X Extracts X X X X X X X X Extracts X X X X ..... to 9% per annum interest from the date of filing of the GSTR03. The respondents shall undertake this exercise at the earliest and calculate the requisite amount towards the interest - application disposed off. - R/SPECIAL CIVIL APPLICATION NO. 15925 of 2018 - - - Dated:- 10-7-2019 - MR J. B. PARDIWALA AND MR A. C. RAO, JJ. For The Petitioner (s) : MR VINAY SHRAFF, ADVOCATE WITH MR.VISHAL J DAVE (6515) AND MR VINAY SHRAFF, ADVOCATE WITH NIPUN SINGHVI (9653) For The Respondent (s) : MR PY DIVYESHVAR (2482), NOTICE SERVED BY DS(5) AND VIRAL K SHAH (5210) ORAL JUDGMENT ( PER : HONOURABLE MR.JUSTICE J.B.PARDIWALA) 1. By this writapplication under Article 226 of the Constitution of India, the writapplicants have prayed for the following reliefs: - 4(a) To issue writ of mandamus and/or any other appropriate writ(s) for directions to the Respondents for providing appropriate compensation as well as interest, for delay in the granting of refund; ( b) To issue order(s), direction(s), writ(s) or any other relief(s) as this Hon'ble Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er state that Section 16(3) of the IGST Act, provides that refund should be claimed in accordance with the provisions of section 54 of the CGST Act or the rules made thereunder. Section 20 of the IGST Act further provides that provisions of CGST Act relating to refunds shall, mutatis mutandis, apply, so far as may be, in relation to integrated tax as they apply in relation to central tax as they apply in relation to central tax as if they are enacted under this Act. 2.7 The petitioners further state that Rule 2 of the Integrated Goods and Services Tax Rules, 2017 provides that the Central Goods and Services Tax Rules, 2017, for carrying out the provisions specified in section 20 of the Integrated Goods and Services Tax Act, 2017 shall, so far as may be, apply in relation to integrated tax as they apply in relation to central tax. 2.8 The petitioners further state that, section 54 of the CGST Act provides for refund as envisaged under section 16 of the IGST Act in a time bound manner. 2.9 The petitioners state that Rule 91 of CGST Rules, 2017 interalia provide that the provisional refund is to be granted within 7 days from the da ..... 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Government on the recommendations of the GST Council shall be payable in respect of such refund from the date immediately after the expiry of sixty days from the date of receipt of application under the said subsection till the date of refund of such tax. 2.14 The petitioners further state that the Central Government vide Notification No.13/2017 Central Tax, dated 28062017 and Notification No.6/2017 Integrated Tax dated 28062017 has fixed the rate of interest from the 1st day of July, 2017 at 6% p.a. and 9% p.a. for the purposes of section 56 and proviso to section 56 of CGST Act 2017 respectively. 2.15 The petitioners state that it is evident from the bare perusal of the Rule 94 of the CGST Rules that proper officer is mandated to order sanctioning of interest on delayed refunds suo motu, where any interest is due and payable to the applicant under section 56, without any application to be made by the registered person for any delay in the refund. 2.16 Without prejudice to the submission in para 2.15 above, the petitioners further state that there is also no option available on the common portal to enable the registered pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cants vehemently submitted that the inaction leading to inordinate delay in granting of refund could be termed as arbitrary and violative of ArticlesPage 14 and 19 of the Constitution of India. Mr. Shraff submitted that the inordinate delay in granting of refund severely impacted the working capital of the company and thereby substantially, diminished its ability to continue its business. 5. Mr. Shraff submitted that the respondents have failed to even file any reply for the purpose of explaining the delay. In such circumstances referred to above, Mr. Shraff, the learned counsel prays that this Court may award appropriate compensation alongwith the interest for the delay in granting of refund. 6. On the other hand, this writapplication has been vehemently opposed by the learned counsel appearing for the respondents. The learned counsel appearing for the respondents submitted that unless there is a specific provision providing for the entitlement of the interest of refund, no interest would be available since equity has no role to play in the matters of taxation. The learned counsel appearing for the respondents submitted that there is no express prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ole or part of the amount claimed as refund is refundable, he may make an order accordingly and the amount so determined shall be credited to the Fund referred to in section 57. ( 6) Notwithstanding anything contained in subsection (5), the proper officer may, in the case of any claim for refund on account of zerorated supply of goods or services or both made by registered persons, other than such category of registered persons as may be notified by the Government on the recommendations of the Council, refund on a provisional basis, ninety per cent. of the total amount so claimed, excluding the amount of input tax credit provisionally accepted, in such manner and subject to such conditions, limitations and safeguards as may be prescribed and thereafter make an order under subsection (5) for final settlement of the refund claim after due verification of documents furnished by the applicant. ( 7) The proper officer shall issue the order under subsection (5) within sixty days from the date of receipt of application complete in all respects. 11. Rule 91 of the CGST Rule is reproduced herein below: - Rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plication is found to be complete in terms of subrule (2), (3) and (4) of rule 89, an acknowledgement in FORM GST RFD02 shall be made available to the applicant through the common portal electronically, clearly indicating the date of filing of the claim for refund and the time period specified in subsection (7) of section 54 shall be counted from such date of filing. ( 3) Where any deficiencies are noticed, the proper officer shall communicate the deficiencies to the applicant in FORM GST RFD03 through the common portal electronically, requiring him to file a fresh refund application after rectification of such deficiencies. ( 4) Where deficiencies have been communicated in FORM GST RFD03 under the State Goods and Service Tax Rules, 2017, the same shall also deemed to have been communicated under this rule along with the deficiencies communicated under subrule (3). 13. Rule 96 of the CGST Rules envisage the refund of Integrated Tax Paid on goods exported outside India. The same is reproduced herein below: - Rule 96: Refund of Integrated Tax paid on Goods or Services Exported out of India. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State tax or Union territory tax to withhold the payment of refund due to the person claiming refund in accordance with the provisions of subsection (10) or subsection (11) of section 54; or ( b) the proper officer of Customs determines that the goods were exported in violation of the provisions of the Customs Act, 1962. ( 5) Where refund is withheld in accordance with the provisions of clause (a) of subrule (4), the proper officer of integrated tax at the Customs station shall intimate the applicant and the jurisdictional Commissioner of central tax, State tax or Union territory tax, as the case may be, and a copy of such intimation shall be transmitted to the common portal. ( 6) Upon transmission of the intimation under subrule (5), the proper officer of central tax or State tax or Union territory tax, as the case may be, shall pass an order in Part B of FORM GST RFD07. 14. Section56 of the CGST Act provides that if any tax ordered to be refunded under subsection( 5) of Section 54 to any applicant is not refunded within sixty days from the date of receipt of the application under subsection (1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FORM GST RFD05, specifying therein the amount of refund which is delayed, the period of delay for which interest is payable and the amount of interest payable, and such amount of interest shall be electronically credited to any of the bank accounts of the applicant mentioned in his registration particulars and as specified in the application for refund. 16. We shall now look into few decisions of different High Courts including our High Court on the subject. 17. The Calcutta High Court in the case of Shiv Kumar Jain Vs. Union of India reported in 2004 (168) E.L.T. 158 (Cal.) held as under: - 4. In my view, the time taken for refund of the money in terms of the CEGAT's order is unreasonable. CEGAT's order was passed on 21st June, 2001 so one could expect either the matter to be taken to higher up, and for this, under law ninety days time is given and on expiry of this time the department was expected to refund this money, since it is a Government Department. So, unlike the ordinary citizen another three months of grace time may be given for taking action. So, the department should have released this amount within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tate has to justify both the grounds which may depend on scheme of the statute, legislative policy, object and purpose of the legislature and other related factors. ..... 19. A Division Bench of this Court in the matter of State of Gujarat Vs. Doshi Printing Press reported at MANU/GJ/0420/2015 held that: - 16. From the conjoint reading of the decision of the Apex Court in the case of Sandvik Asia Limited Vs. Commissioner of Income Tax Others (supra) and the latter decision of the Larger Bench in the case of Commissioner of Income Tax, Gujarat Vs. Gujarat Fluoro Chemicals (supra) it appears that the liability to pay interest on interest by the Revenue is not approved and to that extent the contention of the Revenue can be maintained. But the further contention of the Revenue that no interest whatsoever would be payable if the refund of the amount of tax or refund of the amount deposited towards tax is to be made, no interest whatsoever would be available by way of compensatory measure. 17.In our view, the general principles for awarding compensation to the Assessee for the delay in receiving monies properl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 01/09/17 18/06/2018 290 10/07/17 16380 25/04/2018 236 10/07/17 12763 25/04/2018 236 11/07/17 2,33,103 04/12/17 94 12/07/17 2,77,949 04/12/17 94 13/07/2017 9183 25/04/2018 236 13/07/2017 2,17,718 04/12/17 94 13/07/2017 12534 25/04/2018 236 14/07/2017 1,97,712 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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