Altisource Business Solutions India Pvt Ltd Vs Union of India (Bombay High Court)
Bombay High Court in Altisource Business Solutions India Pvt. Ltd. vs Union of India (judgment dated September 2025) ruled that interest on delayed GST refunds is payable from the date of the original refund application, not from the date of a subsequent reapplication following an appellate order. The Court followed its earlier decision in Lupin Limited vs Union of India (2025) and reaffirmed the settled principle that the statutory 60-day period for granting refunds under Section 54 of the CGST Act begins from the original application date.
The petitioner, engaged in exporting software development services, filed a refund claim of ₹2.85 crore on April 23, 2020, on the ground that exports were zero-rated under GST. The refund was rejected by the adjudicating authority on September 14, 2020. The petitioner appealed, and the Appellate Authority on October 27, 2023, allowed the appeal and directed that the refund be granted. The petitioner reapplied on November 28, 2023, and the refund was sanctioned and credited by February 5, 2024. However, the authorities did not pay any interest on the delayed refund.
The petitioner claimed interest at 6% per annum for 1,232 days—counted from 60 days after the initial refund application date—citing Ranbaxy Laboratories Ltd. v. Union of India (2011) 273 ELT (SC), Lupin Ltd. v. Union of India (Bombay HC, 2025), and similar rulings of the Delhi, Punjab & Haryana, and Telangana High Courts. The Revenue opposed the claim, arguing that since the refund was granted within 60 days of the reapplication made after the Appellate Authority’s order, no interest was due under Sections 54 and 56 of the CGST Act.
The Court noted that this issue was no longer res integra, as it had been conclusively decided in Lupin Ltd. In that decision, the coordinate Bench held that Sections 54 and 56 form a unified scheme ensuring both refund and compensation for delay. Interest is levied not as a penalty but as compensation to the taxpayer when refunds are delayed beyond the statutory 60-day limit. Importantly, the 60-day period is computed from the date of the original refund application under Section 54(1), not from a later date of appellate approval or reapplication.
The Court emphasized that even when a refund is sanctioned following an appellate order, the right to interest under Section 56 arises from the initial application date, since the original rejection order was later found to be unsustainable. The Bench explained that the statute contemplates two distinct contingencies:
