Interest on delayed refund

Case Details:

Issue- In the above case, Respondent vide order dated 19.11.2018 was directed to take a decision on the representation dated 30.08.2018 seeking refund of the tax by passing a speaking order. In compliance of the order dated 19.11.2018, respondent had passed an order on 02.01.2019 wherein it was observed that no direction for refund can be issued unless the conditions stipulated in circular No. 17.17.2017-GST are satisfied. The petitioner submitted a fresh application for issuing refund on 29.03.2019 and was given a notice on 09.04.2019 to fulfill the mandatory condition as per circular No. 94/13/2019-GST dated 28.03.2019 The petitioner reversed the input tax credit in the electronic credit ledger on 11.04.2019 and intimated the same to proper officer. Thereafter, the proper officer on 11.04.2019 issued acknowledgement in form RFD-02 and issued refund on 12.04.2019 i.e. on the very next day of issuing acknowledgement to the petitioner. The petitioner has filed the rejoinder and has placed on record the earlier reply filed by the respondents dated 10.04.2018 in which all the details with regard to deficiency memo towards refund application have been given and contended that the petitioner was entitled for refund straightway as per Rule 91 of CGST Rule to the extent of 90% of the refund and thereafter payment of interest cannot be denied. The respondents had granted refund only for the period of October, November, December, 2017 and January, 2018. The delay had taken place for no fault of the petitioner. Respondent contended that payment of refund has been made as per the guidelines issued by CBEC circular No. 17.17.2017-GST and the moment the petitioner gave his application manually with earlier ARN after reversing input tax credit in the electronic credit ledger on 11.04.2019 and intimated the same to the proper officer. The proper officer issued acknowledgement in form RFD-02 on the same date and on the very next day i.e. 12.04.2019 refund was issued. The payment has been made as per the procedure given in the circular No. 94/13/2019-GST dated 28.03.2019 which covers the payment of refund. Hence, there is no delay on the part of the respondents in making payment of refund.

Held- It was held that as per Section 56 of the Haryana Goods Service Tax Act, 2017 interest is payable to the applicant only when the tax amount is ordered to be refunded under sub section (5) of Section 54 is not refunded within 60 days from the date of receipt of the application but in the present case, since the amount was refunded to the petitioner on the very next day after issuing acknowledgement in Form RFD-02. Hence, there was no delay in issuing refund to the petitioner. Therefore, writ petition was dismissed.