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SONIA GOKANI, MAUNA M. BHATT
Asian Paints Limited – Appellant
Versus
State Of Gujarat – Respondent
JUDGMENT :
SONIA GOKANI, J.
1. The challenge here is to the order dated 18.10.2017 passed by the respondent No.3 granting refund of only principal amount of Rs.1,86,34,083/- (Rupees One Crore Eighty-six Lakh Thirty-four Thousand Eighty-three Only) without interest for the period spanning 2004 till the date to the petitioner under Section 54 of the Gujarat Sales Tax Act, 1969 (‘the GST Act’ hereinafter) alleging the same to be illegal and contrary to law.
2. This Court issued the notice to the respondent on 10.11.2022 by a following order:
The prayer sought for, is as follows:
“7. The petitioner, therefore, prays that this Hon’ble Court be pleased to issue a writ of mandamus or a writ in the nature of mandamus or a writ of certiorari or a writ in the nature of certiorari or any other appropriate writ, direction or order and be pleased to :
(a) command the Respondent/s to pay interest to the petitioner at 6% p.a. on Rs.1,79,08,867/- from 1.4.2005 on Rs
The interest would be payable in terms of the provisions of the statute and any delay in paying the compensation or the amounts due would attract award of interest at a reasonable rate on equitable g....
In tax matters, entitlement to interest on delayed refunds, including on interest accrued, is affirmed, highlighting the principle that overdue amounts accrue additional interest.
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 ....
Interest on delayed refunds under the CGST Act is automatic and obligatory, reinforcing the beneficial nature of the legislation.
Taxpayers are entitled to interest on refunds under Section 244A of the Income Tax Act, and this does not constitute 'interest on interest'.
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