In a taxpayer-friendly ruling, a division bench of the Andhra Pradesh High Court has held that the delay of more than one year in disbursing the VAT refund after passing the same by the department shall attract interest under section 38 (1)(a) of APVAT Act, 2005 r/w. Sub-Section 6 of APVAT Rules, 2005.
The petitioner, M/s Venkateswara Electronic contended before the Court that the Joint Commissioner passed an order on 25.03.2021, accepting the orders of refund of the amount for the period April, 2014 to June, 2017, for Rs.21,55,781/-. However, there is no communication received from the department till date with regard to refund of the amount, though nearly a year has lapsed from the said date. Therefore, the petitioner approached the High Court for relief.
A bench of Justice C. Praveen Kumar and Justice V. Sujatha observed that as per Section 38 (1)(a) of the APVAT Act, 2005, a refund is to be made within 90 days from the date of claim made by the dealer.
“As stated above, the claim was made nearly a year. But, no amount has been released or credited to the account of the petitioner. The plea urged by the respondents is that they are awaiting fund clearance for refund of the amount,” the Court said.
Allowing the writ petition, the Court directed the department to refund the amount which the petitioner is entitled to with interest calculated therein as per the provisions of Section 38 (1)(a) of APVAT Act, 2005 r/w. Sub-Section 6 of APVAT Rules, 2005, within a period of three (3) months from the date of receipt of this order.
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