Deputy Commissioner cannot withhold refund after appellate order becomes final despite questioning its legal validity

Delhi HC allowed writ petition seeking refund after Order-in-Appeal attained finality on 18 October 2022. Deputy Commissioner's opinion that the appellate order was not legally tenable could not be sustained since the order had become final. Court held petitioner's refund claim was clearly merited and directed respondents to immediately process refund along with statutory interest.

---

---

Issues:
- Framing of appropriate direction for release of refunds as claimed by the writ petitioner
- Legality of the Order-in-Appeal dated 18 October 2022
- Mismatch in turnover of zero-rated supply and actual FOB value
- Invoices not reflected in GSTR-2A for the relevant period
- Claim of refund for a shipping bill not pertaining to the refund period
- Grant of statutory interest on the refund claim

Analysis:
The writ petition sought a direction for the release of refunds claimed by the petitioner following an Order-in-Appeal dated 18 October 2022. The respondents did not challenge this order. The Deputy Commissioner, in response to the petition, raised objections regarding the legality of the Order-in-Appeal. The Deputy Commissioner cited discrepancies in turnover values and FOB values, along with invoices not reflected in GSTR-2A for the relevant period. Additionally, a refund claim for a shipping bill outside the refund period was contested. The High Court expressed disbelief at the Deputy Commissioner's stance and ruled that since the Order-in-Appeal had finalized, the objections raised could not be sustained. The petitioner was deemed entitled to the refund along with statutory interest.

The Deputy Commissioner's objections primarily revolved around the perceived legal untenability of the Order-in-Appeal, focusing on discrepancies in turnover values and FOB values, as well as unreflected invoices in GSTR-2A. However, the High Court found these objections unsubstantiated given the finality of the Order-in-Appeal. The Court emphasized the petitioner's rightful claim to the refund and directed the respondents to process the refund claim promptly, including the payment of statutory interest.

Regarding the grant of statutory interest, the Court referred to a previous judgment in Bansal International v Commissioner of DGST and Anr. The judgment clarified the rates of interest applicable under Section 56 of the CGST Act, distinguishing between the standard rate of 6% per annum and the enhanced rate of 9% per annum for delayed payments following final appellate decisions. The Court directed the respondents to process the refund claim along with the payment of statutory interest, as per the rates specified under Section 56 of the CGST Act.

---