2026-VIL-190-BOM
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SGST High Court Cases

GST - Calculation of Statutory Interest on IGST Refund - Section 56 of the CGST Act, 2017 and Section 16 of the IGST Act, 2017 - Petitioner, following a prior High Court order directing the sanction of a refund with statutory interest, received interest payments that were subsequently reduced via a corrigendum or calculated at negligible amounts in separate orders without any clear justification or detailed methodology. The petitioner challenged these orders, contending that the interest calculations were in violation of the rates and mandates prescribed under Section 56 of the CGST Act and contrary to established judicial precedents - Whether the respondents were justified in granting interest at reduced or arbitrary rates without providing a reasoned basis or adhering to the statutory requirements of Section 56 of the CGST Act - HELD - The impugned orders lacked any reasoning or discussion to explain how the interest amounts were determined or why previously sanctioned amounts were reduced. The Revenue is bound by the mandate of law and must calculate interest strictly in accordance with Section 56 as interpreted by the binding decisions of the Court in Altisource Business Solutions India Pvt. Ltd. and Lupin Ltd. - Once the Court has directed that the petitioner would be entitled for ‘statutory interest’, an appropriate exercise in that regard ought to have been undertaken and as acceptable in law and the petitioner was not required to approach this Court on any such issue. The authorities must follow the statutory mandate once the right to statutory interest has been judicially recognized. The petitioner should not have been forced into further litigation for an entitlement already settled by law - The impugned orders and corrigendum concerning interest are set aside and the respondents were directed to pass fresh orders determining the interest amounts strictly as per Section 56 of the CGST Act – The petition is disposed of
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