Facts of the Case

  • The petitioner filed a refund application in Form RFD-01 seeking refund of:
    • ₹25,29,944/- (CGST + SGST)
  • Despite expiry of the statutory period of 60 days, the refund was not processed.
  • Multiple representations/reminders dated 22.09.2021 and 05.10.2021 were submitted.
  • No response or action was taken by the department.
  • The petitioner approached the Delhi High Court seeking:
    • Refund amount
    • Interest on delayed refund
    • Exemplary damages for alleged mala fide conduct

Issues Involved

  1. Whether the tax authorities are bound to grant refund within 60 days under Section 54(7)?
  2. Whether delay in refund automatically attracts interest under Section 56?
  3. Whether non-action by authorities despite representations amounts to arbitrary exercise of power?

Petitioner’s Arguments

  • Refund must be granted within 60 days as mandated under Section 54(7).
  • Any delay beyond this period attracts statutory interest under Section 56.
  • Authorities failed to act despite repeated representations.
  • Reliance placed on:
    • Jian International vs Commissioner of Delhi GST (WP(C) 4205/2020)
  • Allegation of mala fide withholding of refund by the department

Respondent’s Arguments

  • The learned counsel for the respondents accepted notice.
  • On instructions, it was submitted that:
    • The petitioner’s representations would be disposed of in accordance with law within a stipulated time. 

Court’s Findings / Order

  • The Court accepted the undertaking given by the respondent authority.
  • Directed that:
    • The petitioner’s representations dated 22.09.2021 and 05.10.2021 be decided within three weeks.
  • The respondents were held bound by their undertaking.
  • The writ petition was disposed of accordingly.

Important Clarifications by the Court

  • Authorities are expected to act within statutory timelines prescribed under GST law.
  • Delay in refund processing may attract interest liability under Section 56.
  • Courts may intervene where there is administrative inaction or delay, even without adjudicating merits of refund.

Link to download the order -  https://delhihighcourt.nic.in/app/case_number_pdf/2021:DHC:3443-DB/MMH28102021CW122332021_225453.pdf

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