Paradeep Phosphates Limited Vs Additional Commissioner (Orissa High Court)
Orrisa High Court held that the petitioner is entitled to interest on the amount refunded with respect to IGST paid on ocean freight. Accordingly, competent authority is directed to pay simple interest @6% per annum on amount of refund.
Facts- The present petition is preferred by the petitioner invoking extraordinary jurisdiction under Article 226 and 227 of the Constitution of India. Non-consideration of claim for interest on the amount [i.e. refund of IGST paid on ocean freight] refunded to the petitioner from the date of deposit till date of payment is the subject matter in the present writ petition.
Conclusion- Held that the petitioner is entitled to interest on the amount refunded with respect to IGST collected on “ocean freight” for the period the opposite parties retained the same and restrained the petitioner from utilising it. In other words, such interest should commence to run from the date on which the petitioner parted with the money in the first instance and was restrained from using such amount representing the IGST on the component of “ocean freight”. The refund itself is as a result of a finding that the tax ought not to have been collected from the petitioner in the first place. If the tax has to be refunded, and in fact, has been refunded to the petitioner, clearly, therefore, in the considered view of the Court, the interest thereon should begin to run from the date of the deposit of such tax. Consequently, the opposite party-competent authority will pay to the petitioner simple interest @6% per annum on the amount of refund from the period beginning with the date of making payment of the IGST on “ocean freight” in the first instance till the date of actual payment of refund made which shall not be more than eight weeks from today. If there is any further delay than the said period in payment of interest on the refunded amount, the authority concerned will be liable to pay simple interest @9% per annum on the sum refunded for the period of delay.
