Team HR Services Private Ltd VS Union Of India

The petitioner, a partnership firm, filed a petition claiming that it exported goods between November 2019 and June 2020. It contended that it was entitled to a refund of Integrated Goods and Service Tax (IGST) under relevant laws. However, authorities withheld refunds totaling Rs. 1,31,89,893/- for IGST and Rs. 6,98,991/- for duty drawback. Dissatisfied with this, the petitioner approached the court seeking relief. The petition requested the authorities to immediately sanction the refund of IGST paid on exported goods, referred to as “Zero Rated Supplies,” as detailed in shipping bills.

The petitioner, a partnership firm, filed a petition claiming it had exported goods between November 2019 and June 2020. It contended that it was eligible for a refund of Integrated Goods and Service Tax (IGST) as per the law, but authorities withheld refunds totaling Rs. 1,31,89,893/- along with Rs. 6,98,991/- for duty drawback. The petitioner sought relief through the petition, requesting the authorities to immediately sanction the IGST refund for zero-rated supplies and pay interest at 24% per annum on the refunded amount from the date of shipping bills until the actual payment.

During the court proceedings, the petitioner’s advocate informed the court that the main prayer for IGST refund no longer applied, as the petitioner had already received the full refund amount.

The case involves a partnership firm (the petitioner) that filed a petition seeking relief for withheld refunds of Integrated Goods and Service Tax (IGST) and duty drawback, arising from exports made between November 2019 and June 2020. The petitioner claimed eligibility for these refunds under relevant laws but stated that authorities withheld Rs. 1,31,89,893/- for IGST and Rs. 6,98,991/- for duty drawback.

In the petition, the petitioner requested the court to direct authorities to immediately sanction the withheld IGST refund and pay interest at 24% per annum on the refunded amount from the date of shipping bills until payment. However, during the court proceedings, the petitioner’s advocate informed the court that the IGST refund had been fully received, rendering the primary prayer moot. Nonetheless, the petitioner pressed for interest payment, asserting that this claim remained valid.

Reference was made to Section 56 of the Goods and Services Tax Act, 2017, which governs interest on delayed refunds. This section stipulates that if any tax refund ordered under Section 54(5) is not disbursed within sixty days from the receipt of an application.

The petitioner, a partnership firm, filed a petition claiming refund of Integrated Goods and Service Tax (IGST) and duty drawback totaling Rs. 1,31,89,893 and Rs. 6,98,991 respectively, relating to exports made between November 2019 and June 2020. The authorities withheld these refunds. The petitioner sought relief in the form of directing authorities to immediately sanction the IGST refund and pay interest at 24% per annum from the date of shipping bills until the refund payment. During the hearing, the petitioner’s counsel informed the court that the IGST refund had been fully received, thus withdrawing that part of the petition. However, they maintained the claim for interest under Section 56 of the Goods and Services Tax Act, 2017, which stipulates interest on delayed refunds if not paid within sixty days from the application date.

The summary requirement for the refund of taxes under government notification specifies that interest, not exceeding nine percent per annum as determined by the government on the council’s recommendations, applies from sixty days after receipt of the refund application until the refund date. If a refund order is issued by an Appellate Authority, Tribunal, or Court overturning a decision of the proper officer under section 54(5), the appellate decision is considered equivalent to an order under the mentioned subsection.

The government may notify a rate not exceeding nine percent per annum for interest payable on refunds. This interest accrues from sixty days after the application for refund is received until the date the refund is issued. If an appellate authority, tribunal, or court orders a refund against the decision of the proper officer, their order is considered equivalent to an order under section 54(5). The court suggests that applicants should timely apply for interest on refunds as permitted by law from the Goods and Services Tax Authority. An application made within 15 days will be considered by the competent authority, who will decide on granting interest within six weeks from receiving the application. The petition is disposed of with these observation.

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