Case Law Details
Sesame Workshop Initiatives (India) Private Limited Vs Union of India & Ors (Delhi High Court)
Delhi High Court, in the case Sesame Workshop Initiatives (India) Pvt Ltd vs Union of India, issued a landmark judgment on the issue of delayed disbursement of GST refunds. The court held that interest should be allowed due to the inordinate delay in refunding the GST amount to the petitioner, setting a precedent for similar cases in the future.
Analysis: The petitioner, Sesame Workshop Initiatives, had made a refund claim for SGST, CGST, and IGST amounting to a total of ₹1,12,98,201. While the SGST refund was processed and disbursed promptly, the CGST and IGST refund was delayed despite the refund order being passed. As a result, the petitioner sought interest on the delayed refund.
The court, referring to previous Supreme Court judgments, established that a person deprived of payment due to them should be compensated. It was further noted that the interest would be compensatory, payable at 6% per annum, which is the statutory rate for delayed GST refunds.
The court ruled that the petitioner was entitled to interest from 01.11.2021 till 27.04.2023, considering an allowance of twenty-six days for compliance with the refund sanction order. The respondents were directed to pay the interest expeditiously, and in any event, before 31.05.2023.
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