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2010 (6) TMI 725 - HC - VAT and Sales TaxRefund claim - Held that - We are clearly of the view that the petitioner is entitled to payment of the refund of the said amount of ₹ 12,99,718 forthwith along with interest thereon to be calculated in terms of section 42 of the said Act. For the second refund claim the notice under section 59 in connection with refund has to be issued within the period of two months stipulated in section 38(3)(a)(ii). As a result, the submission of the learned counsel for the respondents that because of issuance of notice under section 59 of the said Act, albeit beyond the prescribed time, the refund was not payable, is not tenable. For third claim of ₹ 13,35,537, we find that the return was filed on April 28, 2009 and the period of two months expired on June 27, 2009. In this case, there was no demand for any security within the period of 15 days, as stipulated in section 38(5). In fact, there has been no demand for security at all. Furthermore, no notice is even claimed to have been issued under section 59 in respect of the period of this refund. There is, therefore, absolutely no reason for the respondents to withhold the payment of refund to the petitioner.
Issues Involved:
1. Refund of the amount of Rs. 41,89,487 along with interest. 2. Quashing of the impugned notice dated April 9, 2010, under section 58A for special audit. 3. Release of documents/records seized by way of illegal search. Issue-wise Detailed Analysis: 1. Refund of the amount of Rs. 41,89,487 along with interest: The petitioner, engaged in the business of trading in mobile phones, sought the refund of Rs. 41,89,487 along with interest due to the excess tax paid under the Delhi Value Added Tax Act, 2004. The petitioner limited the submissions to this issue and sought liberty to raise other issues separately. The petitioner claimed entitlement to refunds for the quarters of 2008-09, as follows: - Rs. 12,99,718 for the period 1.7.2008 to 30.9.2008. - Rs. 15,54,232 for the period 1.10.2008 to 31.12.2008. - Rs. 13,35,537 for the period 1.1.2009 to 31.3.2009. Section 38 of the Delhi Value Added Tax Act, 2004, mandates that refunds be made within two months of filing the quarterly returns. The petitioner opted for cash refunds rather than carrying forward the amount as a tax credit. First Refund Claim (Rs. 12,99,718): The petitioner's return was filed on November 3, 2008, and the refund was due by January 2, 2009. The Commissioner could demand security within 15 days of the return, i.e., by November 18, 2008, but no formal demand was made. An oral request for a security of Rs. 5 lacs was complied with by the petitioner. Despite this, the refund was not paid. The court held that the refund should be paid forthwith along with interest as per section 42 of the Act. Second Refund Claim (Rs. 15,54,232): A notice under section 59 was purportedly issued on June 9, 2009, but the petitioner claimed it was not received. The address on the notice differed from the petitioner's address. The court concluded that the notice was not served and even if it was, it was issued beyond the stipulated period, making it invalid for withholding the refund. The refund was due within two months of the return filed on January 28, 2009. Third Refund Claim (Rs. 13,35,537): The return was filed on April 28, 2009, and the refund was due by June 27, 2009. No demand for security or notice under section 59 was issued. The court found no reason for withholding the refund. The court directed that all three refunds, along with interest, be paid to the petitioner within four weeks. 2. Quashing of the impugned notice dated April 9, 2010, under section 58A for special audit: The petitioner sought to quash the notice dated April 9, 2010, under section 58A for a special audit. However, the petitioner limited the submissions to the refund issue and reserved the right to address this issue in separate proceedings. The court granted this liberty. 3. Release of documents/records seized by way of illegal search: The petitioner also sought the release of documents/records seized by way of an illegal search. This issue was not addressed in this judgment as the petitioner reserved the right to raise it in separate proceedings. The court granted this liberty. Conclusion: The court allowed the writ petition to the extent of directing the respondents to pay the refunds due to the petitioner along with interest within four weeks. The petitioner was granted the liberty to address the other issues in separate proceedings.
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