HC Sets Aside IGST Refund Interest Reduction

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  • Last Updated on 21 March, 2026

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IGST refund interest

Case Details: Jindal Drugs (P.) Ltd. vs. Union of India - [2026] 184 taxmann.com 350 (Bombay)

Judiciary and Counsel Details

  • G. S. Kulkarni & Aarti Sathe, JJ.
  • Jas Sanghavi for the Petitioner.
  • Jitendra B. Mishra, Abhishek Mishra, Rupesh Dubey, Ms Raju R. Thalekar & Priyanshu Doshi for the Respondent.

Facts of the Case

The petitioner filed a writ petition challenging the determination of interest on delayed refund of IGST. It was submitted that the authorities were directed to sanction IGST refund along with statutory interest. The petitioner contended that although interest was initially sanctioned, it was subsequently reduced by a corrigendum without assigning any reasons. It was submitted that such reduction and computation of interest were contrary to the statutory mandate, which prescribes the rate and period of interest on delayed refunds. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that the impugned orders determining interest were unsustainable as they failed to provide any reasons or basis for reduction and did not adhere to the mandate of Section 56 read with Section 54 of the CGST Act. It was observed that Section 56 specifically governs the liability to pay interest on delayed refunds while Section 54 lays down the statutory framework for claiming refunds. It analysed the actions of the jurisdictional officer under CGST and found that the reduction of interest through a corrigendum and the grant of nominal interest lacked legal justification. It declined to undertake the computation of interest itself and instead emphasised adherence to the statutory provisions. Accordingly, the orders were set aside to the extent of the interest component, and the designated officer was directed to re-determine the interest.

List of Cases Referred to

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied