2026 (3) TMI 1198 - HC - GST

Statutory refund timelines require sanction of pending refunds and payment of statutory interest where prescribed timelines were breached.

Direction to sanction an outstanding refund and pay statutory interest was reaffirmed, premised on enforcement of the statutory refund timelines and the ... Time limit for refund claim - Failure to comply with statutory time-lines for refund scrutiny - acknowledgement and deficiency procedure - Mandamus for compliance with prior order directing refund with interest. Failure to comply with statutory time-lines for refund scrutiny - HELD THAT:- The Court recorded that the earlier order disposed [2025 (3) TMI 1630 - DELHI HIGH COURT] in light of the coordinate bench decision which found that Rules 90 and 91 provide a complete code with strict timelines for acknowledgement, scrutiny and communication of deficiencies, and that issuance of a deficiency memo after the prescribed period is impermissible. The Court therefore affirmed that it was not open to the respondent to violate the time-lines and issue a deficiency memo beyond the statutory period, entitling the petitioner to proceed for grant of the refund and interest in accordance with law. [Paras 4, 5] The Court held that the respondent could not issue a deficiency memo beyond the prescribed timeline and that the refund claim was to be treated in accordance with the earlier order and applicable rules. Mandamus for compliance with prior order directing refund with interest - HELD THAT:- The Court observed that the earlier order disposing the writ petition directed the respondent to sanction the refund with statutory interest and that the subsequent application did not require clarification of that order. The present petition seeking enforcement was allowed by directing the respondent to take necessary steps to furnish the refund in terms of the earlier directions and in accordance with law, with a time-bound compliance directive. [Paras 5, 6] The respondent was directed to ensure compliance with the earlier order and to furnish the refund along with statutory interest within the period specified by this Court. Final Conclusion: The Court directed the respondent to comply with the earlier order and sanction the refund due to the petitioner for the period April 2020 to March 2022, together with statutory interest, and ordered necessary compliance within three weeks; the petition is disposed of accordingly. Issues: Whether the respondent has complied with the earlier directions to sanction the refund application and, if not, whether the court should direct compliance including payment of statutory interest.Analysis: The orders under challenge relied on the statutory code governing refund claims, which prescribes acknowledgement, scrutiny, and deficiency communication within specified timelines. The governing provisions include the provisions of the Central Goods and Services Tax Act, 2017 relating to refund timelines and interest, and the rules providing the procedure for acknowledgement and deficiency communication. The earlier order disposed of the writ petition on merits directing sanction of the refund and payment of statutory interest where the statutory timelines had been violated. Subsequent interlocutory directions clarified that the earlier order did not require further clarification and that compliance steps should be taken in accordance with law. The present petition records non-compliance with those directions and seeks enforcement of the earlier order; the respondent states the matter is under active departmental consideration and undertakes to comply.Conclusion: The respondent is directed to comply with the earlier directions and sanction the refund along with statutory interest within three weeks. The petition is disposed accordingly in favour of the petitioner.