THE OCWEN FINANCIAL SOLUTIONS PRIVATE LIMITED v. REKHA R

(BY SRI. T. SURYANARAYANA, SENIOR COUNSEL FOR SMT. TANMAYEE RAJKUMAR, ADVOCATE) AND: …PETITIONER REKHA R Location: High Court of Karnataka

2. THE UNION OF INDIA THROUGH THE SECRETARY, MINISTRY OF FINANCE, DEPARTMENT OF REVENUE NORTH BLOCK NEW DELHI-110001 THE DEPUTY COMMISSIONER OF CENTRAL TAX EAST DIVISION 8 EAST COMMISSIONERATE BENGALURU 2ND FLOOR, T.T.M.C. B.M.T.C. BUS STAND BUILDING OLD AIRPORT ROAD DOMLUR BENGALURU - 560 071 …RESPONDENTS (BY SRI. MADANAN PILLAI R., ADVOCATE FOR R1 SRI. JEEVAN J. NEERALGI, ADVOCATE FOR R2) - 2 - NC: 2024:KHC:32404 WP No. 26058 of 2022 THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO DIRECT THE R2 TO ACCEPT PETITIONERS CLAIM FOR INTEREST ON REFUND RECEIVED BELATEDLY AND DIRECT THE R2 TO ADJUDICATE THE MATTER FOLLOWING DUE PROCEDURE TO GRANT SUCH INTEREST ACCORDING TO SECTION 11 BB OF THE CENTRAL EXCISE ACT, 1944. THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE S.R.KRISHNA KUMAR ORAL ORDER In this petition, the petitioner is seeking for the following reliefs: "i. To issue writ of mandamus and /or any other appropriate writ (s) directing the Respondent No. 2 to accept petitioner's claim interest on refund received belatedly and direct Respondent No.2 to adjudicate the matter following due procedure to grant such interest according to Section 11BB of the Central Excise Act, 1944. ii. To issue order(s), direction(s), writ(s) or any other relief(s) as this Hon'ble Court deems fit and proper in the facts and circumstances of the case and in the interest of justice. iii. To award cost of this petition. iv. Pass any other order or give any other direction as this Hon'ble Court deems fit and appropriate in the circumstances of the case." - 3 - NC: 2024:KHC:32404 WP No. 26058 of 2022

2. Heard learned Senior Counsel appearing for the petitioner and learned counsel appearing for the respondent- Revenue Department. Perused the material on record.

3. In addition to reiterating the various contentions urged in the petition and referring to the material on record, learned Senior Counsel appearing for the petitioner invited the attention to the application dated 30.09.2021 submitted by the petitioner for refund of interest on delayed receipt of Service Tax refund, for the period commencing from April, 2011 up to June, 2017 as enumerated in Annexure-A series (colly). It is submitted that as per Section 11 BB of Central Excise Act, 1944 (hereinafter referred to as 'Act') the petitioner would be entitled for refund of interest granted in his favour upon expiry of 90 days from the date of submission of the application, if the refund is not made back to the petitioner within the said period i.e. 90 days.

4. Learned Senior Counsel appearing for the petitioner pointed out that, instead of granting interest on delayed refund, the respondents have issued Communication vide Annexure-B dated

06.01.2022 erroneously stating that question of interest to be sanctioned will be dealt during the adjudication proceedings and - 4 - NC: 2024:KHC:32404 WP No. 26058 of 2022 any grievance has to be ventilated by preferring appropriate appeal. In this context, learned Senior Counsel invited my attention to the said Communication dated 06.01.2022 in order to point out that, undisputedly, the relevant period for which the petitioner is entitled for refund would expire on June, 2017 and adjudication proceedings in respect of the period commencing from April, 2011 to June, 2017 would necessarily have to be initiated within a period of one year and maximum extended period of four years thereafter, in terms of Section 73 of the Finance Act, 1994 and the said period having undoubtedly expired as on the date of filing of the application, the question of refusing interest on delayed refund payment is erroneous and the same deserves to be set aside. It is also submitted that, upon receipt of the said Communication at Annexure-B, dated 06.01.2022, the petitioner submitted reply dated 23.02.2022 giving details and particulars as to entitlement of interest in terms of Section 11BB of the Act and since the respondents did not grant said interest on the delayed refund, the petitioner is before this Court by way of filing the present petition.

5. Learned counsel for the respondents does not dispute that the refund has already been granted in favour of the petitioner. - 5 - NC: 2024:KHC:32404 WP No. 26058 of 2022 However, various other contentions urged on behalf of the petitioner are disputed and it is submitted that, there is no merit in the petition and accordingly, sought for dismissal of the petition.

6. As rightly contended by the learned Senior Counsel appearing for the petitioner, a perusal of the material on record, comprising of the details of the refund orders and refund payments made in favour of the petitioner as enumerated in Annexure-C clearly indicate that, the petitioner would be entitled for interest for delayed refund in terms of Section 11 BB of the Act. The reasons assigned by the respondents in refusing grant of interest in Annexure-B dated 06.01.2022 is clearly erroneous in as much as adjudication proceedings have not been initiated against the petitioner as borne out from the material on record even till today. Under these circumstances, there is absolutely no impediment to direct the respondents to grant applicable interest on delayed refund in terms of Section 11 BB of the Act in favour of the petitioner. However, in order to grant an opportunity to the concerned respondent for the limited purpose to verify the calculation of quantum of interest on the delayed refund as clamed by the petitioner, I deem it just and appropriate to set aside - 6 - NC: 2024:KHC:32404 WP No. 26058 of 2022 Annexure-B dated 06.01.2022 and direct the concerned respondent to grant interest on the refund as sought for in Annexure-C dated 23.02.2022 in favour of the petitioner after making due verification and in accordance with law within a stipulated time frame. In the result, I pass the following: ORDER i) Writ petition is hereby allowed; ii) The impugned communication at Annexure-B dated

06.01.2022 issued by the respondent No.2 is hereby quashed. iii) The respondents are directed to grant/ pay interest on delayed refund of the petitioners as sought for in Annexure-C dated 23.02.2022 after due verification as expeditiously as possible and at any rate within a period of two months from today. Sd/- (S.R.KRISHNA KUMAR) JUDGE RR List No.: 1 Sl No.: 35