The division bench of Allahabad High Court presided by Mr. Justice Surya Prakash Kesarwani and Mr. Justice Jayant Banerji has directs department to refund the amount unlawfully collected along with interest on delayed refund.
The petitioner, M/S Alok Traders is a registered dealer dealing in tobaco. While certain goods sold by him were being transported through vehicle it was intercepted by the Assistant Commissioner, Mobile Squad Unit and demanded tax and penalty of Rs.4,70,400/-, under section 129(3) UP GST Act. The officer created at its own a temporary ID and released the goods on deposit of the demanded amount by the petitioner by an account payee bank draft.
The appellate authority, allowed the appeal against order demanding tax and penalty and then several refund applications were made along with a copy of the appellate order by the petitioner but nothing was done by the respondents, therefore, the petitioner has filed writ petition before the High Court and after that refund has been sanctioned by the respondents to the petitioner and it was paid but without interest.
The petitioner submitted that the Assistant Commissioner, Mobile Squad Unit mischievously created temporary I.D. for depositing of the sum of Rs.4,70,400/- made by him pursuant to the order passed by the officer under Section 129 of the U.P. GST Act, 2017, even though the officer was well aware of the fact that the petitioner is a registered dealer of Gujarat State and the provisions of IGST Act are applicable and all details relating to petitioner were available with him and there was no need to create a temporary I.D.
The High Court observed that the password of the temporary I.D. created by the officer was never communicated to the petitioner despite repeated demands made by him. The appellate authority directed for refund and the order was communicated to the respondents by the petitioner on 09.07.2018, then, the respondents were bound to refund the amount along with interest under Section 56 of the CGST/ U.P. GST Act, 2017 but on one hand, they arbitrarily withheld the refund of the petitioner for more than 33 months and on the other hand, they again arbitrarily acted and have not granted interest to the petitioner on the delayed refund of the amount in question.
The High court further observed that as per the proviso to Section 56 of the Act, 2017, where the appellate order has attained finality and refund arisen therefrom is not refunded within sixty days from the date of receipt of application filed consequent to such order, interest at such rate not exceeding 9% as may be notified by the Government on the recommendations of the Council shall be payable in respect of such refund from the date immediately after the expiry of sixty days from the date of receipt of application till the date of refund.
The division bench directed the respondent to pay interest to the petitioner within a month, for the period from 09.09.2018 to 31.03.2022, at the rate notified under Section 56 of the Act.
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