The Supreme Court of India directed to pay the interest at 6% on refund amount in the matter regarding payment of interest under Section 55 of the Jharkhand Value Added Tax Act, 2005 (JVAT Act).
The order dated 28.11.2023 passed by a Co-ordinate Bench of the Supreme Court in SLP (C) Diary No. 41193/2023 observed that “In the circumstances, that portion of the direction with regard to payment of interest is set aside. In view of the lapse of time, the aforesaid payment shall be made by the petitioner(s) herein within a period of four weeks from today without seeking any extension of time either before this Court or before the High Court.”
The counsel for the respondent submitted that distinction between the aforesaid order and this case inasmuch as in this case there is a specific reference to Section 55 of the JVAT ACT indicating that the interest will have to be paid for the period commencing 90 days after the application for refund has been made; that the legislature has intended that refund application should be decided within a period of 90 days, but in the instant case, the application was kept pending for more than three years and, thereafter simply rejected the same, which rejection order has been set aside by the High Court and there being no merit in this special leave petition, the petitioners are seeking to assail the order of the High Court.
The counsel for the petitioners submitted that having regard to aforesaid order passed by this Court on 28.11.2023, where no direction for payment of interest was made insofar this matter is also concerned which is between the same parties, a consistent order may be made. Secondly, it was submitted that the respondent herein did not make an application for refund within 90 days from the date of demand notice, as per Section 19 of the JVAT Act; that due to administrative reasons there was a delay in rejection of the application.
The counsel further stated that but, interest cannot be payable from lapse of 90 days after making the application for refund. Therefore, it was submitted that portion of the order which refers to Section 55 of the JVAT Act may not be given effect to in this case also as the respondent herein is the very same respondent/Assessee in SLP (C) Diary No. 41193/2023.
A Two-Judge Bench comprising Justice BV Nagarathna and Justice Augustine George Masih observed that “We find that there has been a continuing lapse on the part of the petitioners herein. In the circumstances, we find that the interest of justice would be sub-served, if interest @ 6% on the refund amount is directed to be paid w.e.f. 26.04.2023 till the date of realisation in the instant case. It is needless to observe that the aforesaid refund amount with interest shall be paid within a period of four weeks from today without seeking any extension of time either before this Court or before the High Court.”
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