Order Date – 15 May 2023

Parties: Sesame Workshop Initiatives (India) Private Limited Vs Union of India & Ors

Facts – 

• The Petitioner, Sesame Workshop Initiatives (India) Private Limited, was sanctioned refund of SGST, CGST, and IGST by order dated 04.10.2021. The refund of SGST was processed and disbursed on 09.03.2022. However, the refund of CGST and IGST was only processed on 23.04.2021 and credited into the petitioner’s bank account on 27.04.2023.

Issue – 

• Whether the petitioner is entitled to interest on delayed refund?

Order – 

• The Divisional Bench of Hon’ble High Court observed that Interest is essentially a compensation to a person who has been deprived of use of the amounts due to him. 
• Undisputedly, if a person is denied of the payment due to him, he is required to be compensated. in Sandvik Asia Limited v. Commissioner of Income tax I, Pune: (2006) 2 SCC 508 the Supreme Court has endorsed the principle that interest would be payable even in cases where there was no statutory provision for payment of interest.
• Hence, it was held that the petitioner is entitled to interest on the sum of ₹68,37,488/- from 01.11.2021 (considering an allowance of twenty-six days for the respondents to comply with the refund sanction order dated 04.10.2021) till the date of payment, that is, 27.04.2023. The present petition is disposed of by directing the respondents to pay the interest on the amount of ₹68,37,488/- from 01.11.2021 till 27.04.2023 at the rate of 6% per annum.