2015 (3) TMI 1156 - HC - VAT and Sales Tax

Non-allowance of interest on delayed provisional refund - Section 53 of the Maharashtra Value Added Tax Act 2002 - Manufacturer in cotton yarn hosiery fabrics electronic goods holding certificate of entitlement during the period of assessment - Held that - the Tribunal has rightly interpreted the provisions of sections 51 52 and 53 of the MVAT Act while partly allowing the appeals. It is to be noted here that a conjoint reading of the provisions of section 51 and 53 of the MVAT Act and by applying the same the Tribunal has rightly remanded the matter back to the assessing authority to calculate the period of delay as per observations made in the impugned judgment and has directed to award interest over delayed refund to the respondent. Also there is no substantial question of law as contemplated under section 27 of the MVAT Act is involved in the present appeals. Decided against the revenue

Summary

Issues involved:
- Refund of interest under section 53 of the Maharashtra Value Added Tax Act, 2002 for delayed provisional refund.
- Interpretation of the amended provisions of section 51(4) of the MVAT Act regarding the period for refund.
- Application of the amended provision retrospectively to the period before the amendment.

Analysis:

Issue 1: Refund of interest under section 53
The respondent, a manufacturer, had submitted assessment statements for the period 2005-06 to 2007-08 seeking refund under section 53 of the MVAT Act. The Deputy Commissioner of Sales Tax allowed the refund but rejected the claim for interest on delayed provisional refund. The respondent contended that interest was not granted on delayed refund for the years 2005-06, 2006-07, and 2007-08, despite receiving provisional refunds late. The Maharashtra Sales Tax Tribunal partly allowed the appeals, directing the appellant to pay interest on delayed payment as per section 51(4) of the MVAT Act.

Issue 2: Interpretation of amended provision of section 51(4)
The appellant argued that the amended sub-section (4) of section 51 allowed a refund within 18 months from the application date, and there was no delay in granting refunds to the respondent. However, the respondent contended that the earlier provision of six months applied to their case as the amendment was effective from May 1, 2011, while the relevant period was before that. The court held that the amended provision did not have retrospective effect and applied prospectively from May 1, 2011.

Issue 3: Retrospective application of the amendment
The court clarified that unless the Legislature expressly states retrospective application, amendments do not apply to proceedings initiated before the amendment. The court upheld the Tribunal's decision, stating that it correctly interpreted sections 51, 52, and 53 of the MVAT Act, directing the assessing authority to calculate the delay period and award interest on delayed refund to the respondent. No substantial question of law was found, and the appeals were dismissed for lack of merit.

In conclusion, the court affirmed the Tribunal's decision, emphasizing the correct interpretation of the law and the absence of legal errors in the judgment. The court found no grounds for interference and dismissed the appeals accordingly.