Xilinx India Technology Services Pvt Ltd Vs Assistant Commissioner State Tax (Delhi High Court)
In a significant ruling, the Delhi High Court has directed the tax authorities to pay interest to Xilinx India Technology Services Pvt. Ltd. on its delayed GST refunds. The case, filed under Articles 226 and 227 of the Constitution of India, centered on the company’s petition to process its pending refund applications for several periods spanning from September 2019 to March 2024.
Background of the Case
Xilinx India had filed multiple refund applications for a total amount exceeding 竄ｹ2.22 crore. The company’s grievance arose after the tax authorities eventually sanctioned the refunds but failed to pay any interest, despite the significant delay in processing the applications. The petitioner’s counsel argued that under Section 56 of the Central Goods and Services Tax (CGST) Act, 2017, interest on delayed refunds is automatically payable.
The court noted that while refund orders had been passed, no interest was granted. The court’s order dated February 28, 2025, had initially directed the respondents to file a status report, which confirmed the sanctioning of the refunds but did not mention interest.
Judicial Precedent: The Raghav Ventures Case
To support its argument for automatic interest, the petitioner’s counsel cited the precedent set by a coordinate bench of the Delhi High Court in Raghav Ventures v. Commissioner of Delhi Goods & Services Tax [(2024) SCC OnLine Del 1398]. This case, which the court relied on heavily, dealt with a similar situation where a refund was sanctioned but without the corresponding interest.
