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2024 (5) TMI 1269 - HC - VAT and Sales TaxCalculation of interest - relevant dates for calculation of interest - petition is not a dealer but a transporter, and was not engaged in trading of goods - HELD THAT - Section 42 of the DVAT Act provides that the interest shall be computed from the date when refund was due to be paid to the person until the date of refund. Admittedly, the refund became payable consequent to the orders passed by the DVAT Appellate Tribunal. The interest therefore shall be computed from the date(s) of the orders passed by the DVAT Appellate Tribunal. Admittedly, statutory rate of interest is 6% by virtue of notification dated 30.11.2005. The Tribunal vide order dated 26.08.2021 had set aside the notice of penalty amounting to Rs. 4,91,096/- under Section 86(19) and, therefore, interest on such amount shall be computed and payable from 26.08.2021 at the rate of 6% p.a. till the date of refund. Vide subsequent order dated 10.05.2023, the Tribunal had set aside the payment of tax of Rs. 4,91,096/- and penalty of Rs. 50,000/- imposed under Section 86(14). Therefore, interest on such amount shall be payable from 10.05.2023 at the rate of 6% till the date of refund. The GSTO has rightly computed the interest vide its order dated 31.07.2023, and therefore, the writ petition is devoid of any merits - Petition dismissed.
Issues Involved:
1. Quashing of impugned order dated 31.07.2023 regarding interest calculation. 2. Direction for payment of interest on Rs. 10,32,192/- at 15% from 27.04.2006 to 09.08.2023. Summary: Issue 1: Quashing of Impugned Order Dated 31.07.2023 The petitioner sought a writ of certiorari to quash the impugned order dated 31.07.2023, which provided interest from the date of the Tribunal's decision up to the date of passing the order of sanctioning refund. The petitioner argued that the amount deposited was neither a tax nor a penalty under the DVAT Act and was retained illegally for 17 years, thus warranting interest at the market rate. The respondents contended that the term "person" in Sections 38 and 42 of the DVAT Act includes the petitioner, and the interest rate should be as prescribed under the DVAT Act. Issue 2: Direction for Payment of Interest at 15% The petitioner also sought a writ of mandamus directing the respondents to pay interest on Rs. 10,32,192/- at 15% from 27.04.2006 to 09.08.2023. The Court noted that the petitioner had availed remedies under the DVAT Act and thus could not challenge its applicability now. The Court held that Sections 38 and 42 of the DVAT Act, which use the term "person" instead of "dealer," apply to the petitioner. The interest should be computed from the date the refund was due, as per the DVAT Appellate Tribunal's orders, at the statutory rate of 6% p.a. Analysis & Conclusion: The Court concluded that the provisions of the DVAT Act regarding interest apply to the petitioner, a transporter, and not a dealer. The interest should be computed from the dates of the Tribunal's orders (26.08.2021 and 10.05.2023) at 6% p.a. The petitioner's reliance on cases under the Income Tax Act and Central Excise & Salt Act was found inapplicable. The Court upheld the GSTO's order dated 31.07.2023, computing interest correctly, and dismissed the writ petition. The Revenue was directed to pay the interest as per the impugned order within four weeks. Result: W.P. (C) No. 11463/2023 is dismissed.
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