Revenue Bound to Refund Excess VAT Once Form-P is Issued: Madras HC Orders Return of ₹1.14 Crore with 6% Interest [Read Order]
The Madras High Court ruled that the Revenue refund the excess VAT within 12 weeks with consequent interest.
The Madurai Bench of the Madras High Court recently affirmed that the Revenue is bound to refund excess tax once the Form-P - used to summarize the final outcome of the assessment records the refund. Accordingly, the High Court directed the refund of ₹1,14,89,741 to M/s Madhucon Projects Limited (Madhucon)together with applicable interest of 6% per annum within a period of twelve weeks.
The dispute arises from the assessment year 2008–09, when the Assistant Commissioner (Commercial Taxes), Karur (West) Circle issued an assessment order dated 12 October 2011 to Madhucon, fixing their total turnover at ₹1,50,12,08,828. As per Form-P, that arrears were nil and an excess tax of ₹1,14,89,741 stood payable to the assessee.
Despite the direction in Form-P, the refund was not effectuated and the assessee filed a writ of mandamus before a single judge of the Madras High Court seeking refund.
The Single Judge allowed the writ petition instituted by Madhucon, directing refund with an interest of 6% per annum on the amount, against which the Revenue has preferred the present writ appeal.
The Revenue, represented by R. Suresh Kumar, submitted in their counter-affidavit that the records required further verification because the assessee had earlier been registered in a different district and had transactional links across Chengalpattu, Karur and Ettayapuram. The Department also sought that the matter be remanded to the appellant Assistant Commissioner (Commercial Taxes) herein for fresh scrutiny.
Joseph Prabhakar represented Madhucon Projects Limited.
The Division Bench of Justice C.V. Karthikeyan and Justice R. Vijayakumar observed that the very assessment proceedings relied on by the Department had culminated in the issuance of Form-P, which recorded excess VAT payment and ordered refund.
The Department had also, in its counter-affidavit before the Single Judge, acknowledged that processes for refund were underway and asked for time to verify records.
Accordingly, the Madras High Court upheld the order of the single-judge clarified that once Form-P is issued indicating nil arrears and excess tax, the Revenue has no option but to refund the amount. The Court also rejected the plea to remand the case, while directing that the refund be made within twelve weeks from receipt of the judgment together with applicable interest, within a period of twelve weeks from the receipt of copy of the instant judgment.
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