Order Date –10 August 2023

Parties: M/S Desai Brothers Limited Ratanpur Vs State Of U.P. And 3 Others

Facts – 

• The Petitioner, M/S Desai Brothers Limited Ratanpur, was demanded tax and penalty amounting to Rs. 47,32,040/- consequent to seizure of goods on the allegation of improper documentation giving rise to further allegation of smuggling of those goods inside the State of U.P.
• The amount was furnished in the form of Bank guarantee on 15.03.2018, later on an appeal, which was held in favour of the petitioner sanctioned the refund of above amount along with interest vide order dated 18.03.2019. Though the refund was allowed, neither the principal amount has been refunded to the petitioner nor any interest has been paid thereon though more than four years have passed since then.
• The State respondents are of the view that such refund may have been granted only if the petitioner had made an application for refund on the online form RFD-01.

Issue – 

• Whether the petitioner is required to file an online refund application?

Order – 

• The Divisional Bench of Hon’ble High Court observed that the appeal order dated 18.03.2019 has long attained finality. It clearly contains a recital to refund the amount of Rs. 47,32,040/-. Therefore, by way of a right, that amount cannot be retained by the State. Only procedural requirements were required to be completed for its refund to be made.
• As to the maintainability of the refund claim made by the petitioner, it is not in doubt, the petitioner did make an offline application claiming such refund on 02.04.2019. Rule 97-A of the Rules, and there is no doubt raised by the revenue. Therefore, that application had been filed within the statutory period of two years from the date when the refund became due i.e., upon the first appeal order dated 09.03.2018 being passed.
• Therefore, the revenue authorities were obligated in law to deal with that application in terms of Section 54(7) of the Act, within a period of 60 days. Failing that, the revenue further became exposed to discharge interest liability on the delay in making the refund at the statutory rate from the end of 60 days from 02.06.2019.
• Hence the respondent was directed to dispose of the petitioner's refund claim application dated 02.04.2019 and to pay up the amount of refund claim together with statutory interest, within a period of three months from today.