Win for Ashok Leyland: Delhi HC directs Dept to Refund VAT and Pay 6% Interest on Excess Voluntary Payment [Read Order]
The Petitioner sought the sanction and issue of VAT refund along with Interest in terms of Section 38 and 42 of the Delhi Value Added Tax Act, 2004
Delhi High Court – Ashok Leyland – VAT – Value Added Tax – Refund VAT – Excess Voluntary Payment – Taxscan
Delhi High Court – Ashok Leyland – VAT – Value Added Tax – Refund VAT – Excess Voluntary Payment – Taxscan
In a notable ruling, the Delhi High Court issued directions to the Revenue Department to refund Value Added Tax with 6% Interest thereof, paid in excess by Ashok Leyland against demand order for the Assessment Year ( A.Y. ) 2011-12.
The Writ Petition was lodged by prominent Indian automotive manufacturer, Ashok Leyland seeking issuance of direction to the Respondent to issue refund of Rs.94,71,440/- along with interest for excess voluntary payment made by the Petitioner against a demand order issued under the Central Sales Tax Act, 1956 ( CST Act ), founded on non-furnishing of declaration forms by the Petitioner.
The Future of Tax and Finance: Upskill with Us
The Petitioner, in lieu of the demand order dated 21.03.2016 deposited Rs.1,45,09,588/- with the Respondent and filed objections before the Special Objections Hearing Authority ( SOHA ) seeking a reduction in the demand amount. SOHA vide its order reduced the assessment order demand to Rs.50,38,148/-, resulting in an excess payment of Rs.94,71,440/-.
The Petitioner later filed application in form DVAT-21 as per the Delhi Value Added Tax Act, 2004 ( DVAT Act ) which were sanctioned in part by the Department, limited to the first three quarters of A.Y. 2011-12, albeit., without interest.
The Division Bench of the Delhi High Court comprising Justice Yashwant Varma and Justice Ravinder Dudeja observed that the Respondent Commissioner shall be liable to process and refund excess amount within one or two months in the event that the Assessee does not opt to carry forward the refund amount towards the next period under Section 38(3)(b) of the DVAT Act, 2004.
The Future of Tax and Finance: Upskill with Us
Furthermore, the Bench observed that the State Department had unjustly retained the money without rights and utilized the same despite the Petitioner filing Form DVAT-21 for all the four quarters of A.Y. 2011-12, thereby obligating the Revenue to pay interest towards the retention of money as per Section 42 of the DVAT Act, 2004.
In light of the observations, the Delhi High Court allowed the Petition, directing the Respondent to refund the excess deposit amount along with statutory rate of simple interest at 6% per annum by virtue ofNotificationdated 31.11.2005 issued by the Government Of National Capital Territory Of Delhi, Finance ( Accounts ) Department.
To Read the full text of the Order CLICK HERE
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
