2010 (4) TMI 1000 - HC - VAT and Sales Tax

Interest claim as contemplated under section 24(4) of the Tamil Nadu General Sales Tax Act rejected Held that - Reading section 24(4) of the Tamil Nadu General Sales Tax Act and rule 32(2) of the Tamil Nadu General Sales Tax Rules into section 39A of the Tamil Nadu General Sales Tax Act, when the giving effect order under section 39A had not been made within the 90 days time from the date of receipt of the order of the appellate authority, the petitioner is entitled to be granted interest on the expiry of 90 days from the date of receipt of the appellate authority s order. When the order of the appellate authority has attained finality, the sheer absence of a provision prescribing any time-limit, in section 39A does not justify the view of the respondents that the petitioner is not entitled to claim interest as contemplated under section 24(4) of the Tamil Nadu General Sales Tax Act. Thus on account of the extraordinary delay in passing an order under section 39A of the Tamil Nadu General Sales Tax Act by nearly 13 months in the case of assessment years 1998-99 and 1999-2000 and in the case of assessment year 1997-98, by more than 29 months, no hesitation in granting the relief to the petitioner, thereby directing the first respondent to pay interest to the petitioner at 12 per cent per annum on the refund ordered on expiry of the 90th day from the date of receipt of the appellate order for the assessment years 1997-98, 1998-99 and 1999-2000. The first respondent shall pass the order granting interest as per section 24(4) of the Tamil Nadu General Sales Tax Act within a period of twelve weeks from the date of receipt of a copy of this order.

Issues Involved:
1. Entitlement to interest on delayed refund of excess tax paid.
2. Interpretation and application of Section 24(4) and Section 39A of the Tamil Nadu General Sales Tax Act, 1959.
3. Compliance with Rule 32(2) of the Tamil Nadu General Sales Tax Rules, 1959.

Issue-wise Detailed Analysis:

1. Entitlement to Interest on Delayed Refund of Excess Tax Paid:
The petitioner sought quashing of the order dated February 22, 2006, and requested the first respondent to pay interest for the assessment years 1997-98, 1998-99, and 1999-2000. The petitioner argued that the delay in issuing the refund voucher entitled them to interest as per Section 24(4) of the Tamil Nadu General Sales Tax Act, 1959. The court acknowledged that the petitioner is entitled to interest due to the delay beyond the 90-day period specified in the Act.

2. Interpretation and Application of Section 24(4) and Section 39A of the Tamil Nadu General Sales Tax Act, 1959:
Section 24(4) mandates that if a refund is not made within 90 days from the date of the order of assessment or appellate order, interest at the rate of 1% per month is payable. Section 39A requires the assessment to be amended based on the appellate order but does not specify a timeframe for passing such an order. The court held that the absence of a specific time limit in Section 39A does not negate the obligation to pay interest under Section 24(4) if the refund is delayed beyond 90 days.

3. Compliance with Rule 32(2) of the Tamil Nadu General Sales Tax Rules, 1959:
Rule 32(2) requires the assessing authority to give effect to the appellate order within three months from the date of communication. If a refund is due, it must be processed without interest if done within 90 days. The court observed that the orders for the assessment years 1998-99 and 1999-2000 were passed beyond the 90-day period, thus entitling the petitioner to interest.

Conclusion:
The court concluded that the petitioner is entitled to interest at 12% per annum on the delayed refund for the assessment years 1997-98, 1998-99, and 1999-2000, starting from the 91st day after the receipt of the appellate order. The first respondent was directed to pay the interest within twelve weeks from the date of receipt of the court's order. The writ petitions were ordered accordingly, with no costs.

← Previous Next →