The High Court of Delhi has held that no need to file fresh claims when a refund claim is embedded in return and directed the department to pay 6% interest.
The revenue challenged the order dated 20.06.2022 passed by the Delhi Value Added Tax Appellate Tribunal, Delhi which ruled in favour of CorsanCorviam Construction SA-Sadbhav Engineering Ltd. JV, the respondent-assessee. Thereafter, the assessee was impelled to file the writ petition, as the order dated 20.06.2022 was not being implemented by the revenue.
The assessee claims interest for the period commencing from the date when two months elapsed, and running till the date when the refund was paid. This relief is sought by the assessee in terms of the provisions of Section 38(3)(a)(ii) read with Section 42 of the Delhi Value Added Tax Act, 2004.
The rate at which interest could be granted, even as per the assessee, would be simple interest at the rate notified by the Government; to be computed following the provisions of Section 42 of the Delhi Value Added Tax Act.
The revenue, on the other hand, claims that since the refund arose in favour of the assessee, under the order dated 26.08.2019 passed by the Objection Hearing Authority, the interest would run from the date when a claim for refund is made. The claim for refund, according to the revenue, is required to be made in the prescribed form, i.e., DVAT-21.
The Commissioner of Trade and Taxes granted the assessee a partial refund out of the amount claimed in the return, after adjusting the amount outlined in the notice of default assessment. The assessee was issued a refund order restricted to Rs 1,30,96,335.
A perusal of the order dated 26.08.2019 shows that the OHA only examined the sustainability of the demand raised under Section 32 of the Delhi Value-Added Tax Act. The OHA found that the demand was not sustainable and, accordingly, set it aside.
It was noted that the Commissioner is obligated to refund the tax, penalty and interest, if any, paid by an assessee, which is more than the amount due from it. Before ordering a refund, the Commissioner is empowered to apply the excess amount towards the recovery of any other amount.
The assessee/dealer, on the other hand, is given the right to elect whether it would receive the refund or have it carried forward to the next tax period as a tax credit.
It was evident that the Commissioner has discretionary power under section 38(5)to grant the refund against security, under powers conferred on him under Section 25 within 45 days from the date on which the return is furnished or a claim for refund is made.
The Court comprising Justice Rajiv Shakdher and Justice Tara VitastaGanju held that since the claim for a refund made by the assessee was embedded in its return, it did not arise out of an order passed by the Court or an authority constituted under the 2004 Act, the assessee was not required to file a fresh claim as contended by the revenue under DVAT 21.
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