The Petitioner challenged non-sanction of refund of service tax paid on export of services. The Show Cause Notice proposing denial of refund was challenged. However, during the pendency, refund of principal was granted. The interest on delayed refund from 2010-2011 till 2022 was not granted on the ground that complete set of documents were not submitted by the petitioner. Hence, there is no delay.
The Hon’ble High Court of Bombay held that interest has to be granted after expiry of 3 months from the date of application. The Hon’ble Court further held that it was an unacceptable “excuse” by the department. The department could have issued notice within the said period of 3 months. Once refund is sanctioned, the question of non-submission of documents does not arise. Accordingly, the Hon’ble High Court directed sanction of interest on delayed refund within 8 weeks.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
1. Mr. Raichandani states that petitioner has received the refund and what remains is the interest to be paid for the belated payment. Ms Thakker states in case, refund amount is sanctioned after the period of 90 days, the interest is payable. Ms Thakker states that refund sanctioning authority has agreed to pay interest and that the time period starts from the date of receipt of entire set of documents for the refund. Respondents are not able to make out the date of receipt of entire set of documents from petitioner.
Mr. Raichandani states that the dates of submission of refund application are given in the impugned orders itself. Ms Thakker states that whether the entire set of documents have been submitted is not clear.
2. In our view, that is an unacceptable excuse because respondents should have given to petitioner a list of documents not submitted within three months prescribed for granting the refund. The fact that refund itself has been granted, the excuse of non availability of proof of submitting all documents is unjustified.
3. In the circumstances, respondents are directed to grant refund on the basis of the dates mentioned in the impugned order and interest shall be paid within 8 weeks from today.
4. Petition disposed. No order as to costs.