The Himachal Pradesh High Court said that the issues of interest in a GST refund will be raised before the statutory authority instead of the writ court. The court ordered the taxpayer to approach the legal authority.
The division bench of Justice Ajay Mohan Goel and Justice Yogesh Jaswal stated that the taxpayer must only invoke the finality clause when they are not satisfied with the relief furnished by the regulatory authority.
A writ petition had been submitted by M/s Paramount Agrotech Food (P) Ltd seeking the release of GST refund of Rs 7,77,375 u/s 54 of the GST Act, 2017 with interest u/s 56 based on an order of the appellate authority dated 21st November 2025.
As per the applicant’s counsel, the interest has been pending since 2023. However, the State asserted that the appellate authority passed the order on 21st November 2025 and the department has taken measures. Thus, no interest is left on the part of the applicant.
Section 56 of GST deals with the interest on late GST refunds. When a formal application is submitted for the refund, the department should issue the refund within 60 days. If the refund is issued after 60 days, then the deopartment/ government should pay 6% interest per annum.
Read Also: GST Official Refund Procedure: All You Need to Know
If an application is filed following a favourable order from an adjudicating authority, appellate authority, appellate tribunal, or court, and the refund is not issued within 60 days, the department is required to make payment at an annual rate of 9%.
The Court had not adjudicated the merits of the case. Instead, it stated that the legal authority should be approached regarding interest on delayed refunds.
The bench said that:
‘If, after exhausting statutory remedies, the party is still not satisfied or, for that matter, there is any aggrieved party(s), then such party can invoke the jurisdiction of this Court under Article 226 of the Constitution of India under the “finality clause”.’
In response to the petitioner’s counsel’s submission that the application to be filed before the authority for interest on a delayed refund should be disposed of promptly, the Court directed that the necessary orders be issued within 60 days.
| Case Title | M/s Paramount Agrotech Food (P) Ltd vs State of Himachal Pradesh and others |
| Case No. | CWP No.11706 of 2026 |
| For Petitioner | Mr. Ajay Vaidya, Advocate |
| For Respondent | Mr. Sushant Keprate |
| Himachal Pradesh High Court | Read Order |
