High Court of Delhi

Rashtriya Transport Corporation Vs. Commissioner of Delhi Goods and Service Tax and Ors. (Neutral Citation: 2024:DHC:4318-DB)

MANU/DE/3626/2024

27.05.2024

Sales Tax/VAT

Interest shall be computed from the date when the refund was due to be paid to the person till the date of payment of refund

The Petitioner has preferred present petition for issuance a writ of certiorari thereby quashing impugned order, where in interest has been provided from the date of decision of Tribunal upto date of passing order of sanctioning refund and for issue a writ of mandamus directing the Respondents to issue and pay interest on Rs. 10,32,192to the Petitioner @ 15% from 27th April, 2006 to 9th August, 2023 when the amount has been sanctioned and credited to the account of the Petitioner.

The limited issues which require determination is as to whether the provisions of Delhi Value Added Tax Act, 2004 with regard to grant of interest would be applicable to the case of the Petitioner, who admittedly is not a dealer but a transporter, and was not engaged in trading of goods and what would be the rate of interest and the date from which such interest is payable.

The admitted position is that, default assessment of tax and penalty was made under Sections 32 and 33 of the DVAT Act against the Petitioner on his failure to produce the requisite documents. Petitioner preferred objections before the OHA which were rejected and thereafter petitioner preferred the VAT appeal before the VAT Appellate Tribunal. Thus, process which has culminated into the claim for refund of interest arose by virtue of and under the aegis of DVAT Act. Petitioner himself availed the remedies available under the Act, and therefore, it does not now lie in his mouth to challenge the applicability of the provisions of the DVAT Act. His case is akin to the case of a dealer who is imposed tax and penalty under the provisions of the Act and later succeeds before the Tribunal. Hence, notwithstanding the fact that order of default assessment was set aside, Petitioner would still continue to be governed by the provisions of DVAT Act for the purpose of grant of interest.

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 30th November, 2005. The Tribunal vide order had set aside the notice of penalty amounting to Rs. 4,91,096under 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, 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 10th May, 2023 at the rate of 6% till the date of refund. The GSTO has rightly computed the interest vide its order. Petition dismissed.

Tags : Interest Computation Legality

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