Here's a breakdown of a recent court decision where Altisource Business Solutions India Pvt Ltd battled the Union of India over interest on tax refunds.
Altisource filed a request to get back ₹2.85 crore for software export services, claiming they weren't supposed to pay GST. At first, their request was turned down, but they won an appeal in October 2023. They got their money back by February 2024, but with no extra payment for the wait.
"Altisource asked for a refund on November 28, 2023, which was approved on January 15, 2024, and the amounts were refunded on February 5, 2024. However, no extra payment was made for the wait."
Altisource argued they should get 6% extra payment on the refund because of a delay of 1232 days from their original request. The court initially denied this, saying the refund was within 60 days of their re-application in November 2023.
Their lawyer, Mr. Jarwal, mentioned several previous cases, including the Supreme Court's decision in Ranbaxy Laboratories Ltd, arguing that extra payment should be made from the date of the original request, not the re-application.
"Extra payment is charged for delays in the refund, to make up for the person who has asked for a refund."
The judges, M.S. Sonak and Advait M. Sethna, agreed with Altisource. They referred to the Lupin Limited case, stating extra payment should be made from the original request date if the refund isn't processed within 60 days.
"We allow these requests. We cancel the order dated 09 September 2024 and direct the Union of India to pay Altisource’s extra payment at a rate of 6% per year."
The court ordered the Union of India to pay 6% extra payment on the delayed refund, reinforcing the idea that delays in tax refunds should be compensated fairly.
