A two-judge bench of the Delhi High Court has ordered the Delhi VAT department to pay Rs. 50,000 as compensation if the department delayed the DVAT refund amount with interest within the due date prescribed by the Court.
The Petitioner, a registered dealer under the Delhi Value Added Tax Act, 2004 (DVAT Act), filed a return claiming a refund on 10th July, 2015. The tax period for which refund was claimed was the fourth quarter of 2014. The refund claimed was Rs.2,56,57,120/- and refund allowed was Rs.1,30,96,335/- After set off/adjustments the net amount of refund worked out to Rs.1,30,96,335/-.
The petitioners request to grant refund along with interest was rejected by the department.
Justice S Muralidhar and Justice Talwant Singh has observed that the wording of Section 42(1) of DVAT Act is unambiguous.
“It talks of the two dates i.e. date the refund was due to be paid to the person and „until the date‟ on which the refund is ‘given’. The word ‘given’ should in the context of the provision mean, the date on which the refund amount is actually received by the Petitioner and not the date simply on which the refund order is issued. As a matter of routine, the Court notes that invariably, the refund amount is not received by an Assessee on the date of issuance of the refund order. That date is usually a later date. In the present case, as already noted, the Respondent has not disputed the fact that the refund amount was in fact received by the Petitioner only on 14th September, 2017.”
“In that view of the matter, it is held that the Petitioner is entitled to interest on the refund amount issued by the order dated 25th August, 2017 for the period from 11th September, 2015 till 14th September, 2017. The said interest amount calculated in terms of Section 42 read with Rule 34 and 36 of the DVAT Rules will be credited to the Petitioner’s account not later than 16th August, 2019. It is further directed that if the said amount is not credited by that date, the Respondent will pay the Petitioner Rs.50,000/- as compensation,” the bench said.
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