The Delhi High Court has refused the interest on delayed refund under Delhi Value Added Tax (DVAT Act) as incorrect bank details provided by assessee.
The bench of Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta has observed that as per the explanation in Section 42(1) of the DVAT Act, if the delay in granting the refund is attributable to the said person, whether wholly or in part, the period of the delay attributable to him shall be excluded from the period for which the interest is payable.
The petitioner has sought the refund of the amount of Rs. 25,40,422/- along with interest. The case of the Petitioner is that refund was claimed in terms of the returns filed by it for the first quarter of 2017-18, and as per the Petitioner, the same ought to have been processed within two months in terms of Section 38(3)(a)(ii) of Delhi Value Added Tax Act, 2004 (DVAT Act). Since the refund was not granted, the Petitioner has filed the present petition.
The Department contended that since April, 2023 when the writ was filed, the Respondent wrote to the Petitioner seeking the correct bank details as the earlier bank details which were on record of the Department were incorrect. Upon the proper bank details being furnished the refund was granted on 8th June, 2023. Interest amount is stated to have been paid for the period 7th February, 2023 till 8th June, 2023.
However, the Petitioner was aggrieved by the non-grant of interest from September 2017, the date from which the entitlement, according to him, arises. An order dated 5th July, 2023 regarding interest has, in fact, been passed by the Special Commissioner (Ward-88 Zone-VIII) .
The bank details of the Petitioner being incorrect, in view of explanation in Section 42(1) of the DVAT Act, the Special Commissioner has refused interest for the previous period.
The court held that since the mistake in the bank details would be attributable to the dealer, in the opinion of the Court, the Petitioner would not be entitled to any further interest.
Case Details
Case Title: Lithium Urban Technologies Pvt. Ltd. Versus VAT Commissioner
Case No.: W.P.(C) 4925/2023
Date: 03rd April, 2025
Counsel For Petitioner: Sumit K Batra
Counsel For Respondent: K.G. Gopalakrishnan
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