2020 (6) TMI 496 - HC - VAT and Sales Tax

Refund of Excess payment made towards excess IPT - grant of interest on refund - Section 89(4) of the KVAT Act - HELD THAT - It is ordered that the respondents will immediately take up the plea for refund made by the petitioner in Ext.P4 and after affording reasonable opportunity of being heard to the petitioner, will take considerable decision thereon, passing orders in the matter of grant of refund due to the petitioner, within a period of 4 weeks from the date of production of the certified copy of this judgment and depending on the orders so passed, the consequential steps for disbursing the new refund amounts should also be duly completed by the respondents or the competent official concerned within 4 weeks thereafter. Grant of interest on the refund - HELD THAT - The said claim for interest should also be duly considered and orders passed thereon by the respondent officer in the light of the mandatory provisions contained in Sec.89(4) of the KVAT Act. So that the due admissible interest amounts should also be duly disbursed to the petitioner along with the principal amount of the refund amounts. Petition disposed off.

Summary

Issues:
1. Refund of excess payment made by the petitioner for the years 2014-15, 2015-16, and 2016-17.
2. Entitlement of the petitioner to interest on the refund amount.
3. Compliance with Sec.89(4) of the KVAT Act regarding the timeline for refund and interest calculation.

Refund of Excess Payment:
The petitioner, a registered dealer engaged in the manufacturing and sale of Rubber products, had made excess payments towards IPT for the years 2014-15, 2015-16, and 2016-17, totaling to Rs. 15,78,333/-. Despite the completion of assessments and identification of the excess payments, the amount was not refunded to the petitioner. The petitioner filed a writ petition seeking a direction for the refund of the said amount along with interest at 12% per annum. The court ordered the respondents to take up the plea for refund immediately, provide a hearing to the petitioner, and make a decision within four weeks from the date of the judgment. The consequential steps for disbursing the refund amount were also mandated to be completed within four weeks thereafter.

Entitlement to Interest:
The petitioner also claimed interest on the refund amount as per the mandatory provisions of Sec.89(4) of the KVAT Act. The court directed the respondent officer to consider this claim for interest in accordance with the provisions of Sec.89(4) and ensure that the due admissible interest amounts are disbursed to the petitioner along with the principal refund amounts.

Compliance with Sec.89(4) of the KVAT Act:
The court highlighted the provision of Sec.89(4) of the KVAT Act, which mandates that if a refund or adjustment is not made within ninety days of the completion of assessment, the dealer is entitled to claim interest at the rate of ten per cent per annum. Emphasizing the importance of complying with this provision, the court directed the respondents to ensure that the refund and interest amounts are disbursed within the specified timelines as per the Act.

In conclusion, the court disposed of the writ petition with the above observations and directions, ensuring that the petitioner receives the refund of excess payments along with the applicable interest within the stipulated time frames as per the KVAT Act.