2024 (10) TMI 557 - HC - VAT / Sales Tax

Entitlement of interest for grant of interest on the principal amount - bone of contention of the learned counsel for the petitioner is that the respondents were bound to refund the amount within six months from the date of the order of the Supreme Court i.e., 02.03.2006, they refunded the amount only on 25.04.2012 - HELD THAT - A plain reading of Section 33-B of Andhra Pradesh General Sales Tax Act, 1957 makes it clear that when refund is as a result of order passed in an appeal or other proceedings, the amount must be paid without there being any claim preferred in that behalf by the assessee or licensee. In the instant case, Section 33-B of the Act is applicable with full force. Admittedly, the order dated 02.03.2006 was passed by the Supreme Court, pursuant to which, refund was necessitated. Section 33-F of the Act talks about grant of interest, where no claim needs to be made - in a case of this nature, where the petitioner has succeeded in appeal from the Supreme Court, no claim was required to be made. Thus, Section 33-F of the Act is squarely applicable in the instant case. A conjoint reading of Section 33-B and 33-F of the Act shows that the argument of learned counsel for the petitioner has substantial force. There is a statutory mandate ingrained in Section 33-B and Section 33-F of the Act to pay the statutory interest @ 12% per annum, after six months from the date of passing of the judgment of the Appellate Court, till the date of actual refund i.e., 24.04.2012. Thus, the respondents are directed to calculate and pay the said interest to the petitioner. The entire exercise of calculation and payment of interest to the petitioner shall be completed within (90) days from the date of communication of this order. Petition allowed.

Summary

Issues:
- Grant of interest on the principal amount refunded to the petitioner.

Analysis:
The petitioner initially sought a refund of a tax amount imposed by the respondents under the Andhra Pradesh General Sales Tax Act, 1957. Despite an unsuccessful challenge in the High Court and subsequent deposit of the amount as directed by the Supreme Court, the Civil Appeal was eventually allowed, leading to the refund of the principal amount to the petitioner. The petitioner then claimed interest on the refunded amount based on statutory provisions. The key contention was whether the respondents were obligated to pay interest as per the relevant statutory provisions.

The petitioner relied on Section 33-B and Section 33-F of the Act to argue that interest at a rate of 12% per annum should be paid by the State Government if the refund is not granted within six months from the date of the appellate order. The petitioner contended that the refund was delayed beyond the stipulated period, and therefore, interest was due from a specific date. The respondents, however, argued that the refund was made promptly after the assessment order, and the claim for interest lacked merit.

Upon examining the statutory provisions, the Court found that Section 33-B mandated the refund without the need for a claim by the assessee in cases where an order necessitates a refund. Section 33-F further stipulated the payment of interest at 12% per annum if the refund is not granted within six months from the date of the appellate order. The Court held that the petitioner's argument had merit, and there was a statutory obligation to pay interest on the refunded amount. Consequently, the respondents were directed to calculate and pay the accrued interest to the petitioner within a specified timeframe.

In conclusion, the Court allowed the Writ Petition, ordering the payment of interest to the petitioner as per the statutory provisions. The judgment emphasized the mandatory nature of the interest payment in cases where refunds are delayed beyond the prescribed period, ensuring the petitioner's entitlement to interest on the refunded amount.