CESTAT Orders Interest on Rs. 20 Lakh Refund Delayed by Jurisdiction Confusion

CESTAT ordered payment of interest on a refund that was delayed due to jurisdictional confusion between tax authorities. The tribunal held that taxpayers should not suffer due to administrative ambiguities or disputes between different tax departments. This judgment establishes that refund delays caused by departmental confusion constitute unjust enrichment at the cost of taxpayers. The ruling will help many businesses facing similar situations where refunds get stuck in jurisdictional disputes between central and state authorities. CESTAT emphasized that such inter-departmental issues should be resolved without causing financial hardship to taxpayers who are legitimately entitled to refunds. The decision also sets a precedent for awarding interest in cases of delayed refunds due to administrative reasons beyond the taxpayer's control.