Entitlement to interest on refund cannot be withheld due to an inter se liability dispute; interest must be disbursed to recipient.

Where interest on a tax refund has been deposited, the recipient's entitlement to that interest cannot be withheld pending resolution of an inter se dispute between tax authorities; the note applied Rule 94 of the Central Goods and Services Tax Rules, 2017 and the definition of "proper officer" under the GST Act to conclude that allocation of liability among authorities does not defeat the substantive right to interest, and directed verification and disbursement of the deposited interest to the refund claimant.

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Issues: (i) Whether the petitioner is entitled to disbursement of interest on the refund already deposited in Court notwithstanding an inter se dispute between State and Central authorities regarding liability to pay such interest.

Analysis: The Court noted that the respondent has deposited the amount of interest on refund pursuant to earlier orders. The legal framework invoked includes Rule 94 of the Central Goods and Services Tax Rules, 2017 and the definition of "proper officer" under Section 2(91) of the Goods and Services Tax Act, 2017, which formed the basis of the respondents' inter se dispute over which authority is liable to pay the interest. The Court observed that the existence of an inter se dispute between authorities does not negate the petitioner's substantive entitlement to interest on the refund and that withholding payment from the petitioner on account of unresolved inter se allocation of liability would cause prejudice to the petitioner.

Conclusion: The petitioner is entitled to the disbursement of the interest on the refund; the Registry is directed to verify and disburse the deposited interest amount to the petitioner.

Ratio Decidendi: Where interest on a refund has been found due and deposited, the entitlement of the refund recipient to receive the interest cannot be withheld on account of an unresolved inter se dispute between tax authorities regarding which authority bears the liability.

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