The Delhi High Court in the case Commissioner Of Trade And Taxes Versus Corsan Corviam Construction S.A.-Sadbhav Engineering Ltd. Jv observed and has held that since the claim or a refund made by the assessee was embedded in its return and the assessee was not being required for filing a fresh claim.
The division bench comprising of Justice Rajiv Shakdher and Justice Tara Vitasta Ganju observed and has directed the Department to pay interest within 4 weeks.
However, the assessee in the case filed its revised return on 10.07.2015 for the fourth quarter of the Financial Year 2014-2015. Thus, the tax period of the assessee’s arises every quarter, in terms of Section 38(3)(a)(ii), in the ordinary course, the same would be entitled to a refund within two months after the date on which the return was being furnished. Therefore, on September 10, 2015, the two-month period would end.
An amount of Rs. 1,25,60,785 was refunded by the assessee for the tax period on August 14, 2020 in Form DVAT-22.
Further, the court issued notice to assessee under Section 59(2) of the Delhi Value Added Tax Act, 2004, wherein calling the assessee to submit the relevant records on 11.09.2015, which being after the expiry of two months from the date of furnishing the return.
However, the assessee did not elect for having the amount which is claimed as refund in the return to be carried forward to the next tax period as a tax credit, wherein an option was available under Section 38(3)(b) of the Delhi Value Added Tax Act, 2004.
It has also been claimed by assessee while filing its revised return on 10.07.2015, wherein he had claimed a larger amount as the refund for an amount of Rs. 2,56,57,120 in terms of Section 38.
The court issued a notice of default assessment of tax and interest under Section 32 of the Act, wherein raising the demand which amounts to Rs. 1,25,60,785.
Further, the Commissioner of Trade and Taxes granted the assessee a partial refund out of the amount claimed in the return, after the amount is adjusted set forth in the notice of default assessment. The court issued further order of the refund restricted to an amount of Rs 1,30,96,335.
Therefore, the assessee was constrained to approach the High Court since the order dated August 25, 2017 as it did not direct payment of interest on an amount of Rs. 1,30,96,335.
It has also been noted by the court that subject to other provisions of the very same Rules and Sections, thus, the Commissioner is obligated to refund the penalty, tax and interest, if any which being more than the amount due from it. On the other hand, the dealer/assessee is given the right to elect whether it would receive the refund or have it carried forward to the next tax period as a tax credit.
The court observed and has held that provisions stated under Section 42(1) if reading with section 39, wherein the court made it clear that interest, in any event, was being payable to evaluator, being from the date when it accrued to the assessee in terms of section 38(3)(a)(ii) of the Act.