Order faults department for blaming CPC tech glitches delaying tax refunds, mandates interest until payment and credit by Nov 4

HC criticized the Department's recurring assertion that CPC technical issues delay refunds, held interest is payable until actual payment, and directed respondents to ensure the undisputed refund is credited to the petitioner's account by 4 November 2023 with interest up to payment. The court condemned the waste to the exchequer and urged the Finance Ministry to resolve systemic problems; it ordered circulation of the order to the PMO, Finance Minister, Law Minister, CBDT and Attorney General for information and action.

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Issues involved:
The issues involved in this case are related to seeking a refund amount for Assessment Year 2020-21 and the delay in processing the refund due to technical issues at the Centralized Processing Center (CPC) in Bangalore.

Judgment Summary:

Issue 1: Refund amount discrepancy
The Petitioner sought a refund amount of Rs. 19,69,46,789 for Assessment Year 2020-21, but it was noted that the actual amount payable was Rs. 19,79,40,376. The Respondent did not dispute this amount. The Respondent's reliance on an affidavit of reply highlighted technical issues at the CPC in Bangalore causing delays in processing refunds. The Court criticized the Department for using such technical issues as an excuse for delayed refunds, emphasizing the burden it places on the exchequer and the importance of timely refund disbursement. The Court directed the Respondents, either directly or through the CPC, to ensure that the refund amount is credited to the Petitioner's account by a specified date with interest according to the law.

Issue 2: Delay in refund processing
The Court expressed concern over the standard excuse given by the Department regarding technical issues at the CPC causing delays in refund disbursement. The Court highlighted the importance of timely refund payments, emphasizing that interest is payable by law until the date of refund. The Court urged relevant authorities, including the Finance Ministry, to address and resolve the technical issues causing delays in refund processing to prevent unnecessary litigation and burden on the judicial system. The Court emphasized the need for prompt resolution of technical issues to avoid delays in refund disbursement and to reduce the backlog of cases in the judicial system.

Conclusion:
The Court disposed of the petition, granting liberty to apply. The Court directed the Respondents to ensure the timely crediting of the refund amount to the Petitioner's account by a specified date, along with interest as per the law. The Court highlighted the importance of addressing technical issues causing delays in refund processing to prevent unnecessary litigation and burden on the judicial system.

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