2013 (4) TMI 693 - HC - VAT and Sales Tax

Summary

Issues involved: Assessment order rectification u/s 22, refund of excess amount, payment of interest on refund.

Assessment Order Rectification u/s 22: The petitioner, a registered firm under the U. P. Trade Tax Act, received an assessment order for the year 2003-04 creating a demand of &8377; 84,324. Subsequently, the assessment order was rectified u/s 22 of the Act, reducing the demand to &8377; 30,781.20. The appeal before the Joint Commissioner (Appeals) further reduced the tax liability by &8377; 19,927.

Refund of Excess Amount: The petitioner filed a writ petition seeking a mandamus to direct the respondent to refund a sum of &8377; 1,67,353 along with interest for the assessment year 2003-04. The petitioner had already received the amount, but the dispute remained regarding the payment of interest on the refund.

Payment of Interest on Refund: The Court noted that payment of interest on the refund amount is a statutory liability u/s 29 of the U. P. Trade Tax Act. The Act provides for interest if the refund is not granted within three months from the date of the order. In this case, the petitioner was entitled to interest at the rate of 18% per annum on the refund amount from September 20, 2007, to February 11, 2008. The Court directed the respondent to pay the interest within one month from the date of the order, failing which they would be liable to pay interest on interest at 10% per annum.

Conclusion: The Court held that the respondents failed to fulfill their statutory obligation, and therefore, ordered them to pay a cost of &8377; 10,000 to the petitioner. This amount was also required to be paid within one month from the date of the order. The petition was allowed in favor of the petitioner.