Interest on Customs Refund

In a significant ruling, the Delhi High Court has clarified that grant of refund alone is not sufficient where the State has retained money without authority of law. 

The Court examined whether interest must follow refund, particularly in cases where taxpayers were compelled to pay excess customs duty due to EDI system limitations and delayed reassessment.

The ruling navigates between strict statutory interpretation under Sections 27 and 27A of the Customs Act and broader constitutional principles against unjust enrichment by the State. 

The decision is poised to influence large-value refund disputes in customs and GST regimes, especially those involving system-driven tax payments and delayed adjudication.