2015 (12) TMI 1248 - HC - VAT and Sales Tax

Demand of interest on the delayed payment of Value Added Tax (VAT) refund - Held that - Perusing the present petition and without expressing any opinion on the merits of the case, we dispose of the present petition by directing respondent No.2 to take a decision on the letters dated 1.9.2014, 6.1.2015 and 28.4.2015, in accordance with law by passing a speaking order and after affording an opportunity of hearing to the petitioners within a period of two months from the date of receipt of certified copy of the order. It is further directed that in case it is found that the petitioners are entitled to the amount of refund, the same be released to them within next one month in accordance with law. - Decided in favour of assessee.

Summary

Issues:
- Petition for mandamus to direct payment of interest on delayed VAT refund.
- Delay in refund of excess VAT amount for the accounting year 2006-07.
- Failure to respond to letters requesting interest on delayed payment.

Analysis:
1. The petitioners filed a petition under Articles 226/227 of the Constitution of India seeking a writ of mandamus to direct the respondents to pay interest at 18% per annum on the delayed payment of Value Added Tax (VAT) refund for the accounting year 2006-07. The petitioners had submitted Form VAT 15 for various quarters in 2006-07, seeking refunds totaling Rs. 18,86,978. Respondent No.2 partially refunded amounts on different dates but withheld a balance of Rs. 22,659. The petitioners also sent letters requesting interest on the delayed refund, but received no response.

2. Petitioner No.1, engaged in manufacturing, submitted refund forms to the Excise & Taxation Department, Punjab. Despite partial refunds and orders for further refunds, the petitioners were yet to receive the full refund amount. The matter was remanded for a final order on merits, resulting in an order for refund of Rs. 12,26,220. Subsequent letters requesting interest on delayed payments went unanswered, leading to the filing of the present writ petition.

3. The learned counsel for the petitioners highlighted the lack of action on their requests for interest on delayed VAT refund in the letters sent to the respondents. The High Court, after hearing the arguments and perusing the petition, disposed of the petition by directing respondent No.2 to make a decision on the pending letters within two months. The court instructed that if the petitioners were entitled to the refund amount, it should be released within one month of the decision, emphasizing compliance with the law.

This detailed analysis covers the issues raised in the legal judgment, outlining the background of the case, the actions taken by the petitioners, and the court's directives to address the delayed VAT refund and interest payment requests.