Full Text
HIGH COURT OF DELHI
Decision delivered on: 24.11.2022
KAY ESS ELECTRONICS AND ELECTRICALS ..... Petitioner
Through: Mr Vineet Bhatia, Adv.
Through: Mr Sameer Vashisht, ASC with Ms Sanjana Nangia, Adv.
HON'BLE MS. JUSTICE TARA VITASTA GANJU [Physical Hearing/Hybrid Hearing (as per request)]
RAJIV SHAKDHER, J. (ORAL):
JUDGMENT
1. The substantive prayer made in the writ petition reads as follows: “(a) Issue a writ of mandamus or any other writ, order or direction in the nature thereof directing the respondents to refund the amount of Rs.68,00,114/- and interest amount of Rs. 19,01,224/- due to the petitioner.”
2. The record would show that during the pendency of the writ petition, the respondent/revenue, even according to the petitioner, had refunded the principal amount; therefore, what remains outstanding is only the interest component.
3. The broad facts necessary to adjudicate this aspect of the matter are the following: 3.[1] The petitioner had filed returns for the fourth quarter of 2014-2015 [hereafter referred to as “first period”] and the first quarter of 2016-2017 [hereafter referred to as “second period”]; wherein refund was claimed. The return for the first period was filed on 04.05.2015, while the return for the second period was filed on 05.10.2016.
3.2. In the return for the first period, the petitioner had sought refund at the stage of filing of the return, of an amount equivalent to Rs.95,49,002/-. Insofar as the second period is concerned, the petitioner had sought refund of Rs.83,87,359/-.
3.3. The record shows [and qua which there is no dispute] that demands were created by the respondent/revenue, whereby, for both periods, the petitioner obtained a partial refund. The demand for the first period was quantified at Rs.34,35,157/-, while the demand for the second period was quantified at Rs.33,64,957/-.
3.4. Admittedly, the petitioner filed its objections in accordance with the provisions contained in the Delhi Value Added Tax Act, 2004 [in short
vis-à-vis the second period is that because the petitioner failed to approach the SOHA in time for rectification, no interest should be granted to the petitioner.
5. The petitioner, insofar as the first period is concerned, has sought refund at the statutory rate from the date when SOHA had allowed the objections, i.e., 17.07.2018.
6. As regards the second period, it appears, in the order of the SOHA dated 08.07.2017, an error has crept in, inasmuch as, while its conclusion was right, it had inadvertently noted the value of the C-Forms presented by the petitioner as Rs.33,64,957/-.
6.1. The record shows that this error was brought to the notice of the petitioner by the authority vested with the power to grant refund, which led to the petitioner moving SOHA, for carrying out rectification of the order dated 08.07.2017. The application was moved in the form of communication dated 23.08.2021. The AVATO via communication 03.09.2021 addressed to SOHA, affirmed the fact that an error had crept in the order dated 08.07.2017. Based on the aforesaid, a rectification order was passed on 07.09.2021.
7. Mr Sameer Vashisht, who appears on behalf of the respondent/revenue, says that interest, insofar as the second period is concerned, will commence only from the date of the rectification order and not from the date when the SOHA passed the original order, i.e., 08.07.2017.
7.1. Quite obviously, Mr Vineet Bhatia, who appears on behalf of the petitioner, contends to the contrary.
8. Having heard the learned counsel for the parties, we are of the view that insofar as the first period is concerned, as noticed above, there is no defence. Therefore, interest should be granted to the petitioner on the refunded amount from the date when SOHA passed the order i.e., 17.07.2018, which is also the prayer made by Mr Bhatia on behalf of the petitioner. 8.[1] It is ordered accordingly.
9. As regards the second period, we are unable to persuade ourselves that the stand taken by the respondent/revenue is correct. The reason being that although the rectification order was passed on 07.09.2021 with regard to the typographical error which had crept in the order of the SOHA dated 08.07.2017 concerning the value of the C-Forms, the conclusion remained undisturbed, i.e., the demand continued to be shown as “nil”.
9.1. This was an obvious error, as the demand raised qua which objections were filed was pegged at Rs.33,64,957/-. The SOHA inadvertently noted this as the value of the C-Forms.
10. There is no dispute that the petitioner had presented, at the relevant point in time, i.e., before the order was passed by the SOHA on 08.07.2017, C-Forms worth Rs. Rs.3,42,20,991/-, as recorded in the order dated 07.09.2021.
11. Thus, having regard to the aforesaid, we agree with the submissions of Mr Bhatia that interest should run at least from the date when the petitioner filed an application for refund in the prescribed form, i.e., on 17.07.2017.
12. Interest in this case, is accorded to the assessee based on the principle that it represents the value concerning money that the assessee could not make use of. The money which was due to the petitioner remained with the respondent/revenue, and therefore, the petitioner was entitled to be compensated. The compensation mechanism is provided in the DVAT Act. Besides this, if we were to accept the stand taken by Mr. Vashisht, it would amount to allowing the respondent/revenue to take advantage of the wrong committed by it. It was for the respondent/revenue to have the error corrected.
12.1. The trigger point of the compensation by way of interest is given in Section 38 of the 2004 Act, while the rate is prescribed in consonance with the provisions of Section 42 of the 2004 Act.
13. Having regard to the aforesaid, as regards the second period, interest at the statutory rate, i.e., 6% per annum will be paid to the petitioner for the period commencing from 17.07.2017 till the date of payment of the principal amount, which, we are told is 10.09.2021.
13.1. Insofar as the first period is concerned, as indicated in paragraph 8 above, interest at the statutory rate i.e., 6% per annum shall run from 17.07.2018, till the date of payment of the principal amount, which, we are told is 06.09.2021.
14. The writ petition is disposed of in the aforesaid terms.
RAJIV SHAKDHER, J TARA VITASTA GANJU, J NOVEMBER 24, 2022 aj Click here to check corrigendum, if any