Interest on refunds is warranted from the date of valid application in cases where the authority does not contest the claim, reinforcing the principle of compensation for delayed access to owed funds.

JUDGMENT

[Physical Hearing/Hybrid Hearing (as per request)]

Rajiv Shakdher, J. (Oral)--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 "2004 Act"]. The Special Objections Hearing Authority [in short, "SOHA"] via orders dated 17.07.2018 [concerning the first period] and 08.07.2017 [concerning the second period] allowed the petitioner's objections and reduced the demand to "nil".

3.5. Consequently, the petitioner filed refund applications for both periods. For the first period, refund application was filed on 17.07.2018, while for the second period, refund application was filed on 17.07.2017.

4. In the counter-affidavit filed on behalf of the respondent/revenue, concededly, no defence has been taken with regard to why interest at the statutory rate ought not to be granted to the petitioner vis-`a-vis the amount ordered to be refunded in respect of the first period. The only assertion made vis-a-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 fa