Section 56 of the CGST Act, 2017 --- Interest on Refund – The petitioner sought quashing of the impugned order dated 22.12.2021, vide which the claim of interest of Rs.15,68,26,554/- till 31.10.2021 has been rejected. The petitioner filed CWP challenging the order dated 19.2.2021, praying for a refund amounting to Rs.108.41 crores. The court directed the respondents to refund the amount along with applicable interest within a period of one month. The counsel for the petitioner submitted that the respondent-Department disallowed the interest by employing ex-facie arbitrary interpretation of Section 56 of the Act. The court observed that the position of law is well settled and the provisions relating to interest on delayed payment of refund have been consistently held as beneficial and non-discriminatory. It is true that in the taxing statute, the principles of equity may have little role to play, but at the same time, any statute in taxation matters should also meet the test of the constitutionality and the respondents were not able to explain in any manner the issue of delay in their reply.

Held that:- The Hon’ble High Court partially set aside the order dated 22.12.2021 vide which the claim of interest has been rejected and directed that respondents are liable to pay applicable interest, from the date of filing of the original application, i.e. 5.4.2019. The respondents are further directed to calculate the requisite amount towards the interest and the same shall be paid to the petitioner within a period of two months.