Case Law Details
Bansal International Vs Commissioner of DGST And Anr. (Delhi High Court)
Delhi High Court held that interest on delayed refunds as per section 56 of the Delhi Goods and Services Tax Act, 2017 is payable when refund remains unpaid even after sixty days from the date of application for refund.
Facts- The petitioner has filed the present petition against the order passed by the Additional Commissioner, whereby, the petitioners claim for interest of ₹13,12,761/- calculated at the rate of 9% per annum, on the refund of GST already granted, was rejected. The Adjudicating Authority referred to Section 56 of the Delhi Goods and Services Tax Act, 2017 and had held that in terms of the proviso to Section 56 of the DGST Act, interest was payable only if the refund was not made within sixty days from the receipt of the application filed pursuant to the order passed by the Appellate Authority. Since in the present case, the refund was processed within the period of sixty days from the date of such application, no interest was payable u/s. 56 of the DGST Act.
According to the petitioner, the Adjudicating Authority has misinterpreted the provisions of Section 56 of the DGST Act. The petitioner claims that he is entitled to interest for the period immediately after the expiry of sixty days from the date of the first application for a refund and not after sixty days from the application filed after succeeding in his claim for refund before the Appellate Authority.
Conclusion- On a plain reading of the main provisions of Section 56 of the CGST Act, a taxpayer would be entitled to interest from the date immediately after the expiry of sixty days from the receipt of the first application under Section 54(1) of the CGST Act, which is accompanied by the documents as specified under Section 54(4) of the CGST Act read with Rule 89 of the Rules.
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