The clear impact of CGST Rule 97A cannot be removed by a circular
Savista Global Solutions Private Limited Vs Union of India And 5 Others (Allahabad High Court)
Facts:
- Parties Involved: Petitioner represented by counsel (Nishant Mishra, Nikhil Gupta, Vedika Nath) and respondents represented by counsel (Krishna Ji Shukla, Manu Ghildyal).
- Claim: Petitioner seeks a court order (mandamus) for a refund of Rs.1,28,50,535/- due since July 2019, with additional interest, from respondent no.6, as per an earlier order dated 06.01.2020.
- Refund Application: Petitioner filed a refund application manually on 27.09.2019, permitted under Rule 97A of CGST Rules, although it wasn’t processed within the stipulated 60-day period.
- Interest Claim: As per Section 56 of the CGST Act, interest @ 6% became due from the expiry of the 60-day period until the actual refund payment date.
- Status: Neither the refund amount nor the interest has been paid to the petitioner despite an earlier order.
Observations:
- Admission of Refund: There’s no dispute that Rs.1,28,50,535/- is refundable to the petitioner by respondent no.6 for July 2019.
- Interest Liability: Due to non-compliance with processing the refund within the specified time, the respondents are liable to pay interest.
- Defence Presented: Respondent no.6 claims the refund was approved on 06.01.2020 and forwarded for payment. Respondent no.5 argues the application should have been processed online, pointing out deficiencies in the procedure.
Conclusion:
- Rule 97A vs. Circular: Rule 97A allows manual filing, and the subsequent Circular cannot nullify its effect. Moreover, the Circular issued after the petitioner’s application cannot be applied retroactively.
- Final Order: The respondents are directed to refund the due amount along with 6% interest from 27.11.2019 within one month, offering the choice of payment mode (online or bank draft).
- Inter Se Differences: Any differences between respondent nos.5 and 6 are left for them to resolve for the sake of timely resolution of similar disputes.
- Court Decision: The writ petition is allowed without any cost orders.
In essence, the court found in favor of the petitioner, asserting that despite compliance with the law, the delay in refunding the amount and interest caused undue hardship, leading to the court’s directive for prompt payment within a specified timeframe.
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