2022 (11) TMI 838 - HC - VAT and Sales Tax

Non-grant of refund with interest - notice under section 59 (2) of the Delhi Value Added Tax Act, 2004 issued - HELD THAT - The Commissioner, Trade and Taxes Commissioner is directed to remain present in court on the next date of hearing, to explain as to why, in matter after matter, we find that steps are not taken to refund monies which are otherwise due to petitioners, resulting in a heavy burden on the exchequer. List the matter on 05.12.2022.

Summary

Issues:
Non-grant of refund of Rs. 59,56,772/- along with applicable interest from July 2014.

Analysis:
The petitioner's grievance in this case revolves around the non-grant of a refund amounting to Rs. 59,56,772/- along with applicable interest from July 2014. The petitioner initially filed an original return claiming the refund on 09.05.2014, followed by a revised return on 15.01.2015. Subsequently, a notice under section 59(2) of the Delhi Value Added Tax Act, 2004 was issued to the petitioner on 19.10.2015. Furthermore, a notice of default assessment of tax and interest under section 32 of the DVAT Act was framed on 31.03.2018, with a demand raised against the petitioner amounting to Rs. 34,582/-. The respondent/revenue, represented by Mr. Satyakam, conceded that they have been negligent in processing the petitioner's refund claim.

The court acknowledged the delay on the part of the petitioner in approaching the court promptly when the cause of action first arose in their favor. Despite this delay, the court recognized that a significant amount would still be due to the petitioner as a refund even after adjusting the demand raised against them. The court expressed concern over the lack of promptness both from the assessee and the department, emphasizing the need for expeditious resolution of refund claims to prevent undue burden on the exchequer.

As a result, the court directed the Commissioner, Trade and Taxes, to appear in court on the next hearing date to explain the recurring issue of delays in refunding rightful amounts to petitioners. The Commissioner was tasked with identifying responsible officers and proposing corrective measures to address the inefficiencies in the refund process. Additionally, the Commissioner was instructed to compile information on pending refunds since 2005 for review. The court emphasized the importance of effective systems to ensure timely and accurate processing of refund claims to prevent undue financial strain on the government.

In conclusion, the respondent/revenue was directed to refund the amount due to the petitioner before the next hearing date, and parties were instructed to act based on a digitally signed copy of the order. The matter was listed for further proceedings on 05.12.2022, highlighting the court's commitment to resolving the issue of delayed refunds efficiently.