The Hon’ble High Court of Rajasthan vide its order dated 05.01.2024 in the matter of M/s Baba Super Minerals Private Limited Vs. Union of India & Another in D.B. Civil Writ Petition No. 13746/2022, 1347/2022, 13962/2022 & 14201/2022, found that in terms of Section 56 ‘the date of receipt of application’ can only be read as date of receipt of ‘complete application’ i.e., date of removal of discrepancies in the application.  Therefore, the Authorities were directed to remit the interest under Section 56, calculating the period of 60 days from the date of completing the application.

The Petitioner filed the writ petitions before the Hon’ble High Court being aggrieved of non-payment of the interest on refund and the Appellate Authority not adjudicating the issue on the said aspect, raised by the petitioner.

Facts: –

• The Petitioner being entitled to seek refund, made applications seeking refund in Form GST RFD -01A and Refund ARN receipt.
• The respondents pointed out the deficiencies in three cases and the deficiencies were rectified by the petitioner, whereafter an acknowledgment was issued to the petitioner. However, while granting the refund, the interest as provided under Section 56, was not ordered to be paid. Though, the said aspect was not dealt with by the Appellate Authority.

It was submitted on the behalf of the Petitioner that in terms of Section 56, the petitioner was entitled to get interest from the 60^th day of making the application for refund.  Admittedly, the amount of refund has been paid to the petitioner after expiry of 60 days, however, the interest has not been ordered to be paid and therefore, it was prayed to direct the respondents to make payment of interest to the petitioner.

On the other hand, it was submitted on the behalf of the respondents that the plea raised by the petitioner cannot be accepted as the applications made by the petitioner were deficient and therefore, after the deficiencies were rectified, the orders have been passed and refund claim was granted to the petitioner.  Thus, the petitioner is not entitled to interest.  Hence, the petitions are liable to be dismissed.

Held: –

• The Hon’ble Court after considering the submissions made and facts of the case, found that the orders of refund in Civil Writ Petition Nos. 13746/2022, 13962/2022 and 14201/2022 indicate that the applications, filed by the petitioner, were deficient and those deficiencies were later on removed by the petitioner. However, in Civil Writ Petition No. 13747/2022, there was no deficiency in the refund application.
• It was found by the Hon’ble Court that in all the writ petitions, the refund has been granted beyond the period of 60 days as prescribed under Section 56 of the Act. However, in absence of any order of grant of interest, no interest was paid to the petitioner.
• It was found by the Hon’ble Court that there is no dispute that there were deficiencies in three cases, which were later on rectified by the petitioner. Further, in terms of Section 56, if any tax ordered to be refunded to any applicant, is not refunded within 60 days from the date of receipt of application, the interest at the rate not exceeding 6% shall be payable for the period of delay beyond 60 days.
• It was found by the Hon’ble Court that as provided in Section 56, the ‘date of receipt of the application’ can only be read as date of receipt of a ‘complete application’ i.e., after removal of deficiencies.
• It was further found that in the present case, there were deficiencies in three cases, though, in one case, there was no deficiency but the amount of tax was refunded to the petitioner after 60 days, therefore, the respondents are required to determine the actual delay and make payment of the amount of interest to the petitioner in terms of provisions of Section 56 of Act of 2017.

The Hon’ble Court with the above observations and findings, disposed of the writ petition with the directions to the respondents to make payment of amount of interest to the petitioner in terms of the provision of Section 56 of the Act of 2017, calculating the period of 60 days from the date of completing the application.  The petitioner would make an application to the respondents pointing out the amount of interest due to the petitioner and from the date of submission of the applications, within a period of four weeks, the amount of interest shall be paid to the petitioner.