Interest is Payable for Excessive Refund Delay even if Statutory Provision is not Available: HC

Case Details: Sesame Workshop Initiatives (India) (P.) Ltd. v. Union of India - [2023] 151 taxmann.com 52 (Delhi)

Judiciary and Counsel Details

• • Vibhu Bakhru & Amit Mahajan, JJ.
  • Sandeep Chilana, Snehil Sharma, Prem Kandpal & Ms Anjali Jain, Advs. for the Petitioner.
  • Neeraj, Rudra Paliwal, Vedansh Anand, R. Ramachandran, Rajeev Aggarwal & Ms Shilpa Singh, Advs. for the Respondent.

Facts of the Case

In the present case, the petitioner filed petition seeking interest on delayed refund. It was contended that refund of SGST was processed but the refund of CGST and IGST was not processed despite the refund order. Therefore, it was argued that interest would be payable as there has been an inordinate delay in disbursing the refund.

High Court Held

The Honorable High Court noted that in the instant case, refund of SGST was processed but the refund of CGST and IGST was processed after filing of writ petition. The interest would payable in case of inordinate delay in disbursing refund even in cases where statutory provision is not available for payment of interest. However, in the instant case, the Statute itself provides to pay 6% rate of interest in case of delay in processing refund by department. Therefore, the Court directed department to pay the interest at the rate of 6% per annum as expeditiously as possible.