The Allahabad High Court in the case of M/S Tata Aldesa (J.V.) Versus State of UP has held that interest on delayed refund cannot be denied due to dispute between state and central GST department.
The bench of Chief Justice Arun Bhansali and Justice Kshitij Shailendra has Insofar as the order passed seeking to disown the liability, for whatever reason, the issue is between the State authorities and the CGST authorities which will have to be resolved among them. The petitioner cannot be deprived of the amount of interest on account of the inter se dispute between the authorities.
The bench noted that insofar as the order passed seeking to disown the liability, for whatever reason, the issue is between the State authorities and the CGST authorities which will have to be resolved among them. The petitioner cannot be deprived of the amount of interest on account of the inter se dispute between the authorities.
The petitioner sought a direction to the respondents/department to disburse the amount of refund sanctioned to the petitioner vide refund sanction order along with interest.
The SGST produced a communication dated 07.11.2024 indicating that the amount of refund to the tune of Rs.38,10,351/- has been credited to the Bank account of the petitioner on 07.11.2024.
The petitioner submitted that the amount which is claimed to be paid was required to be paid along with interest in terms of provisions of Section 56 of the CGST Act, 2017 which inter alia requires payment of interest at the rate of 6% per annum in case the refund is not made within 60 days from the date of receipt of the application and as admittedly a completed application was received by the respondents, and the amount was paid, as such the petitioner is entitled to interest for the period beyond 60 days from the date of making application.
The petitioner contended that the petitioner is least concerned with the fact pertaining to the inter se dispute between the State and the Central authorities. The petitioner is entitled to an amount of interest for the delay in making payment under the provisions of Section 56 of the CGST Act, 2017 and, therefore, it should be paid to him and the authorities can decide the liability/dispute among themselves.
The court held that it will be open for the state departments to resolve the dispute with the Central authorities in accordance with law. However, the payment of interest to the petitioner would not be dependent on the resolution of dispute between the two authorities.
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Case Details
Case Title: M/S Tata Aldesa (J.V.) Versus State of UP and 4 others
Case No.: Writ Tax No. – 1172 Of 2024
Date: 2.12.2024
Counsel For Petitioner: Nishant Mishra
Counsel For Respondent: Pranjal Mehrotra, Priyanka Midha, Ankur Agarwal
