The Delhi High Court ruled that DVAT department can’t defeat the assessee’s right of refund & interest merely on grounds of investigation, involvement of legal issues.
The court stated that the Commissioner is obliged to refund the tax, penalty and interest, if any, paid by an assessee which is more than the amount due from it. The Commissioner has powers to first apply such excess amount towards the recovery of any other amount due under the DVAT Act.
“Requirement to file DVAT-21 was considered by this Court in Flipkart India Private Limited Vs. Value Added Tax Officer, W.P.(C) 6430/2022. This Court had held that once a claim for refund stands embodied in the return itself, there is no obligation upon the assessee to file Form DVAT-21”, the bench observed.
The bench said that the return filed by the Assessee is required to be considered as an application for refund and the Respondent is required to process the same.
The bench added that Harmonious reading of Sections 38 & 42 makes it clear that interest is payable to the Petitioner from the date when it accrued, in terms of Section 38 (3) (a) (ii) of 2004 Act.
The court observed that vide order dated 13.12.2022 it has set aside the notice of Default Assessment dated 28.08.2020, revived the claim for refund embedded in the Petitioner’s return with the removal of the clog placed upon it by the Default Assessment Order dated 29.08.2020. Petitioner cannot be denied interest on the amount of interest withheld unjustifiably. Since the refund was withheld, assessee automatically becomes entitled to the interest under Section 42 (1) of the DVAT Act.
It was viewed by the court that the petitioner is entitled for interest on refund and such claim cannot be defeated on the mere ground of investigation and involvement of legal issues, which ultimately came to be decided in favour of the petitioner by orders passed by the High Court.
Facts
Petitioner is a registered dealer under Delhi Value Added Tax Act, 2004, and the Central Sales Tax Act, 1956.
Petitioner filed quarterly returns for the 4 th quarter of the assessment year [‘AY’] 2016-17 and the 1st quarter of the Assessment Year 2017-18, therein claiming concessional rate of interest in respect of interstate sales on the basis of C Form.
Petitioner reported interstate sales for the given period two quarters and claimed a refund against the ‘C’ Forms.
Since the claim for refund was not processed, petitioner filed writ petitions before this Court, praying that the directions be issued for refund of the amount claimed for the 4th quarter of assessment year 2016-17 and the first quarter of Assessment Year 2017-18.
Case Information
Case Name: Mangalam Traders V/S Commissioner Of Delhi Value Added Tax Department Of Trade And Taxes And Anr
Judicial Level & Location : Delhi High Court
Case Number : W.P.(C) 9990/2023
Date of Decision : 31/07/2024
Decision in favor of: Petitioner
Judges: Justice Yashwant Varma and Justice Ravinder Dudeja
Counsel for Petitioner : Mr. Rakesh Kumar & Mr. Praveen Kumar, Advocates
Counsel for Respondent : Mr. Rajeev Aggarwal, ASC with Ms. Samridhi Vats, Advocate
