Challenge on Interest under sub-section (1) of Section 42 of DVAT Act can be granted when VAT refund is withheld: SC condones delay [Read Order]

The Supreme Court of India condoned delay in the matter regarding the challenge on interest under sub-section (1) of section 42 of the Delhi Value Added Tax ( DVAT ) Act, 2004 can be granted when value added tax ( VAT ) refund is withheld.

The SLP arose out of the impugned final judgment and order dated 21-09-2023 in WP(C) No. 2491/2023 passed by the High Court of Delhi at New Delhi

The Delhi High Court held that “In so far as issuance of the impugned default notices of tax & interest is concerned, in light of the case of the respondent that revised return dated 31 March 2017 was filed for the 4th quarter 2015-16 and notices under Section 59(2) DVAT Act dated 19 February 2016, 27 May 2016 and 25 May 2018 were not complied with by the petitioner, the only recourse in law is to file a statutory appeal under Section 74 of the DVAT Act and it would be open to the petitioner to raise all objections regarding untenability of the impugned default notices of tax & interest including under Section 34 of the DVAT Act with regard to the limitation prescribed for assessment or re-assessment.”

A Two-Judge Bench of Justices Pamidighantam Sri Narasimha and Prasanna Bhalachandra Varale observed that “Heard Mr. N. Venkataraman, learned Additional Solicitor General appearing for the petitioner and Mr. Rajesh Jain, the counsel appearing for the respondent. Delay condoned. Leave granted. Hearing concluded. Judgment reserved.”

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