2015 (12) TMI 1385 - HC - VAT and Sales Tax

Refund the excess Input Tax Credit (ITC) alogwith Interest for delayed 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.3 to decide the application dated 16.6.2014 along with calculations, Annexures P-5 and P-6, in accordance with law by passing a speaking order and after affording an opportunity of hearing to the petitioner within a period of one month from the date of receipt of certified copy of the order. It is further directed that in case it is found that the petitioner is entitled to the amount of refund, the same be released to it within next one month.

Summary

Issues:
1. Claim for excess Input Tax Credit (ITC) refund under Punjab Value Added Tax Act, 2005.
2. Delay in processing refund applications and payment of interest.
3. Non-action on rectification application for refund order.

Analysis:
1. The petitioner, a partnership firm engaged in construction activities in Punjab, filed a writ petition seeking a mandamus to direct the respondents to refund the excess ITC as per an order issued by respondent No.2. The petitioner, a registered dealer under the Punjab Value Added Tax Act, regularly claimed refunds due to tax deductions and input tax credits. Despite timely filing of refund applications, delays occurred in processing, leading to dissatisfaction. An assessment was conducted under Section 29(2) of the Act, resulting in an excess ITC refund of Rs. 42,85,570, paid without interest. An appeal was made against certain disallowed expenses, which was later allowed. Subsequent refund claims faced delays and discrepancies, prompting the present petition.

2. The petitioner's counsel highlighted the inaction on their application for rectification of the refund order, emphasizing the need for timely resolution. The Court, without delving into the case's merits, directed respondent No.3 to decide on the rectification application within one month of receiving the order copy. The decision must be supported by a speaking order, ensuring the petitioner's right to a fair hearing. If the petitioner is found eligible for the refund amount, it should be released within the following month, adhering to legal provisions.

3. The judgment addresses the procedural delays and lack of response faced by the petitioner in obtaining the rightful refund under the tax legislation. By instructing a time-bound resolution and emphasizing compliance with legal requirements, the Court aims to ensure fair treatment and timely redressal for the petitioner's grievances. The directive to issue a speaking order underscores transparency and accountability in the decision-making process, safeguarding the petitioner's interests and upholding the principles of natural justice.