Revenue authorities must process refund application within two-year period under Section 54 IGST Act

HC directed revenue authorities to process refund application filed by petitioner within statutory two-year period under Section 54 IGST Act. Petitioner's bank guarantee was encashed to recover penalty amount before appeal remedy could be availed. Court found refund application dated 02.04.2019 was filed within prescribed timeframe from first appeal order dated 09.03.2018. Revenue failed to dispose application within mandatory 60-day period under Section 54(7), attracting interest liability at 6% per annum. Writ of mandamus issued directing respondent to dispose refund claim and pay amount with statutory interest within three months. Petition allowed.

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Issues Involved:
The issues involved in the judgment are the direction for refund of a recovered amount, delay in processing the refund claim, interpretation of relevant provisions of the Act and Rules, and the obligation of revenue authorities to deal with refund applications within a specified time frame.

Refund of Recovered Amount:
The petitioner, an ex-UP dealer, sought a direction for the refund of Rs. 47,32,040/- recovered upon encashment of a bank guarantee furnished to secure interest regarding a penalty order. The goods were seized, leading to a demand for tax and penalty. The petitioner challenged the order, which was subsequently allowed, but the refund was not processed, citing the lack of an online application for refund. The petitioner had filed a physical application within the statutory period, and the court directed respondent no. 3 to dispose of the refund claim and pay the amount with interest.

Delay in Processing Refund Claim:
The delay in processing the refund claim was attributed to the petitioner's alleged failure to file an online application despite communications. The petitioner argued technical glitches prevented online filing and submitted physical applications within the statutory period. The court held that the petitioner's physical application was valid, and the revenue authorities were obligated to process it within 60 days, failing which interest liability accrued.

Interpretation of Provisions of the Act and Rules:
The court referred to Section 54(1), Section 54(7), and Section 56 of the Act, along with Rule 97-A of the UP GST Rules, 2017. It noted that the petitioner's offline application was within the statutory period, as per Rule 97-A, which allows manual filing. The court emphasized that the revenue authorities were required to deal with refund claims within the specified time frame and were liable for interest on delays.

Obligation of Revenue Authorities:
The court issued a writ of mandamus directing respondent no. 3 to process the petitioner's refund claim and pay the amount with statutory interest within three months. It emphasized the finality of the appeal order and the procedural requirements for refund, highlighting the revenue's obligation to adhere to the statutory timelines for processing refund claims. The petition was allowed, with no costs imposed.

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