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2024 (5) TMI 323 - HC - VAT and Sales TaxComputation/quantification of interest on the delayed refund in terms of Section 42 of Delhi Value Added Tax Act, 2017 w.e.f. 01.06.2015 - Time Limitation - expiry of two months from the date of filing of refund of the application till 23.05.2023 when the refund was disbursed to the petitioner - HELD THAT - Section 42 (1) of the Act mandates grant of simple interest at the annual rate notified by the Government from time to time, to a person who is found entitled to refund in case of any delayed payment. In the instant case, refund has been sanctioned without any interest. It is an admitted position that annual rate notified by the Government for the purposes of Section 42 of the Act is simple interest @ 6% per annum. The petition is disposed off.
Issues involved: Computation of interest on delayed refund u/s 42 of Delhi Value Added Tax Act, 2017.
Issue 1: Computation of Interest on Delayed Refund The petitioner sought computation/quantification of interest on the delayed refund u/s 42 of the Act from the expiry of two months from the date of filing the refund application till the date of actual disbursement of the refund. The petitioner had filed a VAT Return for the Fourth Quarter of 2013-2014 on 31.03.2015, making the refund claim due on 01.06.2015 as per Section 38(3)(a)(ii) of the Act. Issue 2: Applicability of Interest Provision The Court noted that Section 42(1) of the Act mandates the grant of simple interest at the annual rate notified by the Government to a person entitled to a refund in case of delayed payment. The annual rate notified by the Government for the purposes of Section 42 of the Act was found to be simple interest @ 6% per annum. Judgment: The Court disposed of the petition directing the respondents to consider the petitioner's claim for interest on the delayed refund in accordance with Section 42 of the Act. If the petitioner is found entitled to interest, it should be sanctioned and disbursed within four weeks. However, if the proper officer determines that interest is not payable, a speaking order should be communicated to the petitioner within the same period. The petitioner was also granted the liberty to pursue further legal remedies if aggrieved by any decision of the respondents.
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