### Statutory Interest on Delayed IGST Refund Is Mandatory Upon Expiry of Sixty Days Under Section 56 CGST Act

The Petitioner, a proprietor of Guru Nanak Motor House, exported goods (mobile/motor accessories) between December 2018 and January 2019 under 30 shipping bills

The goods were seized by the SIIB on allegations of value mis-declaration, leading to an Order-in-Original that confiscated the goods and re-determined the FOB value

On appeal, the Commissioner of Customs (Appeals) set aside the order on 25 June 2021, citing gross violations of natural justice and "haphazard investigation"

The CESTAT subsequently dismissed the Department’s appeal on 03 December 2021, which the Department accepted

Despite the finality of these orders and the release of goods, the IGST refund was not fully processed until after this writ petition was filed in January 2025

While most principal amounts were refunded during the pendency of the petition, the issue of mandatory interest remained unresolved

1. Whether the Department is statutory obligated to pay interest on delayed IGST refunds under the CGST Act when the underlying dispute has attained finality

2. Whether administrative "bonafide" processes or internal alerts justify the withholding of interest on tax refunds

Section 56 of the CGST Act, 2017, which mandates interest at a rate not exceeding 6% if a refund is not processed within 60 days of the application, and up to 9% where the refund arises from an order of an adjudicating or appellate authority that has attained finality

Principles from Ms. Anita Agarwal vs. Union of India, which established that suspicious refund claims must be verified within a strict time frame (as per Circulars No. 16 of 2019 and 131/1/2020) to ensure business liquidity and international competitiveness

The court reasoned that under Section 54, an export shipping bill is deemed an application for refund

Once the appellate proceedings reached finality via the CESTAT order in December 2021, the Department had no legal basis to withhold the refund

The court rejected the Respondents' argument that interest was not payable due to "bonafide administrative processes" or "justified preventive measures"

It observed that the Department's stance was "mechanical" and "oblivious to the record," as it ignored binding judicial orders that had exonerated the Petitioner

The court emphasized that the right to interest under Section 56 is a statutory obligation triggered by the expiration of the 60-day window from the date of the refund application or the date the order became final

It held that the Petitioner is entitled to interest on the delayed refund in accordance with the mandate of Section 56 of the CGST Act

The Respondents were directed to comply with the order and calculate/disburse the interest within four weeks