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SGST High Court Cases

GST - Section 56 of the CGST Act, 2017 - Refund of IGST, Interest on delayed refund, Delay in refund due to "risky exporter" status - petitioner filed various shipping bills during August 2018 to July 2019 and claimed a refund of IGST - the refund was granted only in August 2020 after the petitioner's name was removed from the "risky exporter" list - Whether the petitioner is entitled to interest under Section 56 of the CGST Act, 2017 for the period starting from the expiry of 60 days from the date of filing the shipping bill up to the date of grant of refund, despite the delay being attributable to the petitioner's name being red-flagged on the respondents' portal – HELD - the objective of Circular No.16 of 2019 and Circular No.131/1/2020 is to ensure that the investigation in case of a suspicious refund claim is completed within the specified time frame, so that the exporters can get the refund within the time specified. However, in the present case, the respondents failed to complete the investigation within the time frame and the delay was not attributable to the petitioner - The delay is squarely attributable to the inaction of the Respondents in not completing the investigation within the time frame specified in the Circular - the Petitioner cannot be made to suffer because of inaction or delay in the Respondent’s action in completing the investigation after the Petitioner has been red flagged – Further, Section 56 of the CGST Act does not provide for excluding the period during which the respondents are investigating the grant of refund and the respondents have not provided any justification for denying the interest on the delayed refund - the petitioner is entitled to interest under Section 56 of the CGST Act for the period starting from the expiry of 60 days from the date of the shipping bill up to the date of grant of refund - the respondents are directed to grant interest for the period starting from the expiry of 60 days from the date of the shipping bill up to the date of grant of refund, excluding the 30-day period provided in the circular for completing the investigation – the writ petition is allowed
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