I SUPREME COURT
23 Union Of India vs. Willowood Chemicals Pvt. Ltd.
2022 (60) GSTL 3 (SC)
Date of order: 19th April, 2022
Interest at 9% on delayed refund can be granted only where refund arises on account of an order of adjudicating/appellate/Tribunal/Court
FACTSRespondent was engaged in the export of goods without payment of duty and claimed the refund application of unutilized ITC of inputs and input services. There was no dispute concerning the eligibility for a refund. However, there was a delay of 94 to 290 days on the part of the department in disbursing the refund. Respondent filed a writ petition before the Hon’ble High Court asking for interest at 9% for such inordinate delay. Subsequently, the High Court decided the matter in favour of the respondent and granted interest at 9%. Being aggrieved by such, the appellant filed this special leave petition before the Apex Court.
HELDThe Supreme Court held that since delay in granting of refund ranged from 94 to 290 days was not excessive or unreasonable; interest should be granted solely as per the GST Law. It was further held that interest at the rate of 9% is applicable only when there is a delay in granting a refund pursuant to an order passed by Adjudicating Authority or Appellate Authority or Tribunal, or Court. Thus, the Hon’ble Supreme Court held that the High Court had erred in granting interest at 9% on delayed refund, and the
