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YASHWANT VARMA, DHARMESH SHARMA
Femc Pratibha Joint Venture – Appellant
Versus
Commissioner of Trade And Taxes – Respondent
JUDGMENT
Dharmesh Sharma, J.
1. This writ petition under Article 226 and 227 of the Constitution of India filed by the petitioner is directed against the respondent thereby assailing the impugned adjustment order dated 18 November 2022 and default notices of tax & interest for certain years, to be detailed hereinafter, under the Delhi Value Added Tax Act, 2004[DVAT Act].
FACTUAL BACKGROUND
2. Briefly stated, the petitioner is a Joint Venture Group that had been engaged in the execution of work contracts for Delhi Metro Rail Corporation Ltd.[DMRC] and discharged its VAT liability under the DVAT Act as well as under the Central Act. For the purposes of executing various projects for DMRC, it had been making local purchases after bearing tax thereupon while on the other hand DMRC had also been deducting TDS on the gross turnover of the petitioner. The petitioner claimed refund of excess tax credit which arose due to Input Tax Credit[ITC] , the credit of which was brought forward for a sum of Rs. 17,10,15,285/- for the 4th quarter of 2015-16 and of Rs. 5,44,39148/- for the 1st quarter of 2017-18, along with the applicable interest as under Section 42 of the Delhi Value Added Tax Act of 20
State authorities are mandatorily required to pay interest on delayed tax refunds at the prescribed rate once the statutory limit for processing passes. Procedural failures in notification or record-....
The main legal point established is that the refund under the DVAT Act should be processed within the stipulated period, and interest is payable from the date the refund was due to be paid.
Refund of VAT – Department must adhere to timeline stipulated therein to fulfil object of provision which is to ensure that refunds are processed and issued in a timely manner.
The main legal point established in the judgment is that the right to interest on a refunded amount accrues to the assessee on the date specified in Section 38(3)(a)(ii) of the Delhi Value Added Tax ....
Settlement Act is self-contained code; post-payment under scheme, no outstanding dues exist for MVAT refund adjustment from prior period against settled subsequent period demand.
The central legal point established in the judgment is the obligation of the Respondents to decide the claim for refund in accordance with the law and the principle of 'unjust enrichment' expeditious....
The court emphasized that orders passed by administrative or quasi-judicial authorities are required to stand or fall on their own and subsequent explanations by way of affidavit(s) cannot be permitt....
The adjustment of tax refunds against outstanding demands cannot occur if no dues exist at the time of adjustment, protecting taxpayers from unlawful retention of funds.
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