Interest on Delayed Refund Not Hit by SC Suo Moto Extension

 

It is to apprise you that the Hon'ble Delhi High Court ('HC') in the case of Ankush Auto Deals v. Commissioner of Delhi GST, 2022-VIL-561-DEL, held that the Hon'ble Supreme Court ('SC') suo moto extension order does not apply to interest on delayed refund under Section 56 of the Central / Delhi GST Act, 2017 ('Act').

The Department sought to rely on the Madras HC decision in the case of GNC Infra LLP v. AC, 2021-VIL-856-MAD, wherein the HC held that SC suo moto extension order would apply to refund application under Section 54.

The Delhi HC rejected such reliance as misplaced and observed that neither Madras HC nor SC suo moto extension order dealt with interest on delayed refund under Section 56 of the Act. Hence, the Court ordered the Department to pay interest to the taxpayer.

. | Remarks

This is a welcome decision and a correct one.

In fact, the recent Notification No. 13/2022-Central Tax dated July 5, 2022, extending time limit only applies to refund applications under Section 54 and 55 and does not apply to interest under Section 56.