Case Note & Summary
The petitioner filed a writ petition challenging an order by the Joint Commissioner (Appeals) that declined a refund claim. Since the GST Tribunal was non-functional, the petitioner approached the court. The Commissioner acknowledged the petitioner’s entitlement to the refund in an affidavit, citing the retrospective amendments in Section 50 of the CGST Act, 2017. The court directed the respondents to refund the claimed amount as no interest was payable under the amended provisions.
Acts and Sections Discussed Central Goods and Services Tax (CGST) Act, 2017 Section 50(3) – Interest on wrongly availed and utilized input tax credit. CGST Rules, 2017 Rule 88B – Manner of calculating interest on delayed tax payments. SubjectGST Refund and Interest Liability Based on Retrospective Amendments.
GST Refund, CGST Act, Input Tax Credit, Retrospective Amendment, Interest Liability
1. Rule Made Returnable ImmediatelyThe court, with consent from the parties, made the rule returnable immediately.
2. Challenge to the Order Dated 18 August 2021The petitioner contested the order passed by the Joint Commissioner (Appeals), which denied a refund claim.
3. Absence of GST TribunalThe petitioner filed the writ petition as the GST Tribunal was not operational.
4. Affidavit Filed by CommissionerMr. Dhirendra Lal, Commissioner of CGST and Central Excise, filed an affidavit acknowledging the petitioner’s eligibility for the refund.
5. Reference to Amendments in CGST Act and RulesThe affidavit referenced amendments in Section 50 and Rule 88B, clarifying that interest is applicable only if the electronic credit ledger balance falls below the wrongly availed credit amount.
6. Court’s Direction for RefundThe court set aside the impugned order and directed the respondents to refund the amount of ₹9,26,570/- within four weeks, noting the petitioner's non-utilization of the excess credit.
7. Rule Made AbsoluteThe court concluded the case without awarding costs due to the fair approach of the respondents.
8. Compliance DirectiveThe court ordered compliance based on an authenticated copy of the order.
Ratio DecidendiThe court determined that the petitioner was not liable for interest on the excess credit as per the amended Section 50(3) of the CGST Act, 2017. The balance in the petitioner’s electronic credit ledger never fell below the wrongly availed amount, which confirmed that the petitioner did not utilize the excess credit, and thus, interest was not applicable.
Issue of Consideration: Soorajmull Bajinath Private Limited Versus Union of India & Ors.
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