Order Date – 07 December 2023

Parties: Real Prince Spntex Pvt Ltd Vs Union of India

Facts –

• The Petitioner, Real Prince Spntex Pvt Ltd, was sanctioned with the refund of IGST paid on exports without obtaining letter of undertaking with simple interest @7% by adjusting the differential duty drawback from the refund entitlement.
• However, the Deputy Commissioner of Customs passed the order pursuant to the directions of this Court and granted the refund by adjusting the differential duty drawback along with interest at the rate of 15% from the refund entitlement and further granted interest at the rate of 6% instead of 7% as directed by this Court.

Issue –

• Whether the charging interest at the rate of 15% on the differential duty drawback and reducing the interest @ 6% are proper?

Order –

• The Divisional Bench of Hon’ble High Court observed that once the Court has issued the directions, the same are binding upon the respondent-authorities and the respondent-authorities had no reason to take a different view than the directions issued by the Court while exercising the powers under Article 226 of the Constitution of India.
• The respondent-authorities are bound by the directions issued by the Court and therefore, the impugned order is hereby, quashed and set aside. The respondent-authorities are directed to comply with the directions issued by this Court while sanctioning the refund of IGST after deducting the differential duty drawback with 7% simple interest as ordered by the Court.
• The writ petition is allowed.