2026-VIL-665-GUJ
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SGST High Court Cases

GST - Interest on Refund – Relevant date of reckoning for computing interest under Section 56 of CGST Act, 2017 – Pursuant to High Court order directing authorities to process the refund application in accordance with law, the petitioner filed a fresh refund application on 11.11.2025 – The Respondent authority sanctioned the refund amount but denied the interest by invoking the provisions of Section 56 of the CGST Act construing the date of subsequent filing of the refund application as the date of reckoning for computing interest - Whether the respondents were justified in denying interest by considering the date of the fresh refund application filed after the Court's order or whether the date of the initial refund application rejected by the respondent should be considered for computing interest on the refund – HELD - Since the initial action of the respondent in refusing to process the refund application dated 14.10.2023 was held to be illegal and was set aside by this Court, the authorities were required to consider the date of the initial refund application for calculating interest instead of the subsequent application filed after the Court's order - When the initial denial of refund is declared illegal and set aside, the fresh application filed thereafter satisfies the provisions of Section 56 of the CGST Act, and the interest claim must be processed by considering the date of the earlier application. The respondent's illegal action in denying the refund cannot be used to deprive the petitioner of interest that would have accrued from the original date of filing - The impugned orders are set aside to the extent of denial of interest, and the respondent is directed to pass necessary orders on the claim of interest on refund by the petitioner, considering the date of the initial refund application for calculating interest – The petition is allowed
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