2021 (7) TMI 843 - HC - VAT and Sales Tax

Non-grant of interest on the additional refund amount - respondent passed order with regard to the additional refund payable to the petitioner, but, had failed to award statutory interest - section 38(2) of Gujarat VAT Act - HELD THAT - It is not disputed and even otherwise stated in the orders passed in revisions, the petitioner, taking advantage of the Amnesty Scheme, had made payment of the tax amount only and the petitioner was granted the remission for the interest amount as per the order dated 21.07.2020. The order passed by the appellate authority having been revised by the revisional authority as per the order dated 21.07.2020, the question of invoking the provisions contained in section 38(2) of the said Act did not arise. It is needless to say that as per the provisions of section 38(2) of the said Act, a registered dealer entitled to refund in pursuance of any order other than referred to under sub-section (1) or in pursuance of any order by any Court, would be entitled to receive, in addition to the refund, simple interest, as mentioned in the said sub-section (2) - So far as the present cases are concerned, by virtue of the orders passed in the revisions, the petitioner was not entitled to any amount of refund and on the contrary, was liable to pay additional amount of tax with interest. There being no order passed by the revisional authority for refund of any amount, nor any order passed by any other Court, invocation of sub-section (2) of section 38 of the said Act by learned advocate Mr. Trivedi for the petitioner is thoroughly misplaced. All the petitions being devoid of merits, are dismissed.

Issues Involved:
1. Petitioner seeking relief for interest on refund amount under section 38(2) of the Gujarat Value Added Tax Act, 2003.
2. Allegation of failure to award statutory interest by respondent No. 2.
3. Dispute over rectification application filed by the petitioner.
4. Interpretation of provisions of section 38(2) of the said Act.
5. Revisional authority's imposition of additional liability on the petitioner.

Detailed Analysis:
1. The petitioner, a company incorporated under the Companies Act, 1956, sought relief for interest on a refund amount under section 38(2) of the Gujarat Value Added Tax Act, 2003. The petitioner's appeal for refund was allowed, leading to a payment order for the refund amount. However, a subsequent order imposed additional tax liability on the petitioner, which was paid under protest. The petitioner contended that interest under section 38(2) should have been awarded along with the refund. Similar proceedings were initiated for other assessment years as well.

2. The bone of contention was the alleged failure of respondent No. 2 to award statutory interest as per section 38(2) of the said Act when passing the order for the additional refund payable to the petitioner. The petitioner argued that the interest should have been awarded even without a specific demand. The rectification application filed by the petitioner was challenged on the grounds of extraneous considerations.

3. The Court examined the submissions made by the petitioner's advocate and found them lacking in merit. It was noted that the petitioner did not object to the absence of interest on the additional refund amount after the appeals were disposed of. The revisional authority had imposed additional tax liability on the petitioner, which was paid under the Amnesty Scheme. As no refund order was passed, the Court concluded that invoking section 38(2) for interest was not applicable in this case.

4. The interpretation of the provisions of section 38(2) of the said Act was crucial in determining the petitioner's entitlement to interest on the refund amount. The Court highlighted that the section provides for simple interest to a registered dealer entitled to a refund in specific circumstances. Since the petitioner was not entitled to a refund due to the additional tax liability imposed, the invocation of section 38(2) for interest was deemed misplaced by the petitioner's advocate.

5. Ultimately, the Court dismissed all the petitions filed by the petitioner, ruling that they were devoid of merit. The judgment emphasized that as per the orders passed by the revisional authority imposing additional tax liability, the petitioner was not entitled to any refund amount, thereby negating the need for interest under section 38(2) of the said Act.

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