Case Law Details
Raghav Ventures Vs Commissioner of Delhi Goods & Services Tax (Delhi High Court)
Introduction: In a pivotal decision, the Delhi High Court addressed the issue of interest entitlement on Integrated Goods and Services Tax (IGST) refunds under Section 56 of the Delhi Goods and Services Tax (DGST)/Central Goods and Services Tax (CGST) Act. The case, Raghav Ventures Vs Commissioner of Delhi Goods & Services Tax, revolved around the petitioner’s entitlement to interest on the IGST refund, which was not explicitly claimed in the refund application but deemed necessary under statutory provisions.
Detailed Analysis: Raghav Ventures, an exporter of mobile phones and accessories, found itself embroiled in a legal battle for the IGST refund for the tax periods from December 2022 to May 2023. Despite fulfilling the requisite procedures for refund claims through the prescribed forms and receiving system-generated acknowledgments, the refund sanctioned to the petitioner excluded the interest component, leading to the writ petition.
The crux of the dispute was whether the petitioner was entitled to interest on the IGST refund, as per Section 56 of the DGST/CGST Act, despite not claiming it explicitly in the refund application (FORM-GST-RFD-01). The respondent objected to the grant of interest, arguing that the petitioner had only claimed the integrated tax amount, not the interest, thus waiving his right to the latter.
However, the High Court, referencing Para 34 of the Circular issued by the Central Board of Indirect Taxes and Customs (CBIC), highlighted that interest under Section 56 becomes payable if the refund is not processed within 60 days from the receipt of the application. This statutory entitlement to interest does not depend on a claim made by the petitioner and is automatically payable, rendering the respondent’s objection invalid.
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