2026-VIL-999-BOM
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SGST High Court Cases

GST - Levy and collection of interest on belated payment of additional duties of customs, Absence of statutory authority to levy interest prior to amendment, Rule 96(10) CGST Rules regarding double benefit - As per Rule 96(10) CGST Rules, since petitioner claimed benefit both on import side (exemption) and export side (refund), petitioner was required to pay back one benefit. Petitioner chose to pay back additional duties of customs and also paid interest on such amounts - Whether Customs Authorities had statutory authority to levy and collect interest on belated payment of additional duties of customs and whether petitioner is entitled to refund of interest paid - HELD – The Mahindra & Mahindra Ltd. and A.R. Sulphonates Pvt. Ltd. decisions held that no provisions existed under Customs Tariff Act 1975 during the relevant period empowering Customs Authorities to levy and collect interest on belated payment of additional duties of customs – The Supreme Court in Goodluck India Ltd. held that Rule 96(10) is deemed to have been omitted since inception. Since Rule 96(10) is deemed omitted since inception, there was no legal requirement or obligation on petitioner to make repayment of additional duties of Customs. Therefore, the question of levying interest on such repayment does not arise. Interest levied on amounts which did not legally fall due constitutes collection without authority of law – The petitioner's choice to pay back duties on import side was predicated on assumption that Rule 96(10) was valid, which it was not. Petitioner is entitled to recover interest paid on repayment of duties which were not legally required to be paid – The Respondent authorities are directed to process application for refund and refund the amount of interest paid expeditiously – The writ petition is allowed
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