Facts of the Case

Bharti Airtel Limited (GSTIN 37AAACB2894G1ZM), a telecom operator registered at Visakhapatnam, had multiple refund applications sanctioned by the department vide Form GST RFD-06 orders dated 12.01.2021. While part of the sanctioned refund had been disbursed, the balance SGST portion amounting to Rs.1,44,65,283 (bill no.2021-167078) had not been paid, and interest of Rs.1,30,30,168 that had accrued due to delayed processing of the refund applications also remained unpaid. The petitioner approached the High Court seeking a direction for disbursal of the balance refund along with statutory interest under Section 56 of the CGST Act, 2017. During the hearing, the department's counsel conceded that the petitioner's entitlement to refund was not in dispute, but stated that disbursal was pending at the CFMS (Central Financial Management System) level.

Issues Involved

  1. Whether the department could withhold disbursal of an admittedly sanctioned GST refund merely because payment was pending at the CFMS processing stage.
  2. Whether the petitioner was entitled to statutory interest under Section 56 of the CGST Act, 2017 for delayed refund.

Petitioner's Arguments

  • The refund orders in Form GST RFD-06 dated 12.01.2021 sanctioned the amounts, yet the balance SGST portion of Rs.1,44,65,283 remained undisbursed without justification.
  • The non-payment of the sanctioned refund and the failure to pay accrued interest was illegal, arbitrary and contrary to the provisions of the CGST/SGST Acts.
  • The petitioner sought a direction for immediate disbursal of the balance refund together with interest accrued up to the date of actual payment.

Respondent's Arguments

  • Counsel for respondents no.1 and 3 candidly accepted that the petitioner's entitlement to the refund was not disputed.
  • It was submitted that the matter was pending only at the CFMS level for actual disbursal of the sanctioned amount, and not on account of any dispute on merits.

Court Order / Findings

  • The Court found no justification in keeping the writ petition pending once the department itself had conceded that the petitioner's entitlement to refund was undisputed.
  • Respondents no.1 and 3 were directed to ensure payment of Rs.1,44,65,283 as per Form GST RFD-06 dated 12.01.2021 within four weeks from production of a copy of the order before respondent no.3, as per Section 56 of the CGST Act, 2017.
  • The Court clarified that if statutory interest was payable on the refund, the same was also to be paid within the same four-week period.
  • The writ petition was disposed of accordingly, with no order as to costs.

Important Clarification

  • Where the department itself admits that a refund sanctioned under Form GST RFD-06 is undisputed, internal processing delays such as pendency at the CFMS level are not a valid ground to withhold disbursal, and courts will issue a time-bound payment direction.
  • Statutory interest under Section 56 accompanies delayed refund disbursal as a matter of course once the underlying entitlement is not in dispute.

Sections Involved

  • Section 56, Central Goods and Services Tax Act, 2017 — provides for interest on delayed refunds where the refund is not disbursed within the statutory period.
  • Section 54, Central Goods and Services Tax Act, 2017 — governs the refund mechanism, including Form GST RFD-06 sanction orders.

Decision – In Favour of

Decided in favour of the Assessee; the Court directed disbursal of the balance sanctioned SGST refund of Rs.1,44,65,283 together with applicable statutory interest within four weeks.

Related Case Laws

This decision is consistent with the settled position that once a refund stands sanctioned under Form GST RFD-06, procedural or systemic delays in actual disbursal cannot defeat the taxpayer's right to the refund and to statutory interest under Section 56 of the CGST Act, 2017. Readers may also refer to other GST refund-delay rulings on this site dealing with Section 56 interest claims.

Case Details

  • Court: High Court of Andhra Pradesh at Amaravati
  • Case No.: WRIT PETITION No.182 of 2022
  • Coram: Hon'ble Mr. Justice Ahsanuddin Amanullah and Hon'ble Mr. Justice G. Ramakrishna Prasad
  • Date: 24.02.2022
  • Petitioner: Bharti Airtel Limited
  • Respondents: State of Andhra Pradesh and Others

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