Back
IN THE HIGH COURT OF RAJASTHAN AT JAIPUR BENCH
ARUN BHANSALI, ASHUTOSH KUMAR, JJ.
Dwejesh Acharya - Petitioner
Versus
Income Tax Officer and Anr. - Respondents
D.B. Civil Writ Petition No. 10210 of 2022
Decided On : 05-12-2023
ORDER :
This writ petition has been filed by the petitioner seeking a direction to the respondents for payment of interest on the amount of refund as due against the respondents.
2. Submissions have been made that pursuant to Vivad Se Vishwas Act, 2020 ('VSV Act') for settlement of disputes, the petitioner filed an application on 17/6/2020 for the dispute relating to Assessment Year 2013-14 and after making necessary compliance got the Form No. 3 of the VSV Act on 25/1/2021 indicating a refund of Rs.3,47,03,505/-. Whereafter, on filing Form No. 4, the petitioner received Form No. 5 from the respondents under VSV Act on 8/3/2021 indicating that full and final settlement has been done in accordance with Form No.3.
3. Pursuant to the Form Nos. 3 & 5 as issued by the respondents under VSV Act, the petitioner made several representations for issuing refund of Rs.3,47,03,505/-. After making several requests, the petitioner received/got adjustment against demands for Rs.11,86,641/- on 10/1/2022, Rs.2,59,48,974/- on 30/5/2022, Rs.70,476/- on 22/10/2021 and Rs.74,97,414/- on 20/1/2022 totaling Rs.3,47,03,505/-, however, no interest was paid for the delayed payment.
4. Learned counsel for the petitioner made submissions that though the entire amount to which the petitioner was entitled on 8/3/2021 on issuance of Form No.5 (Annex.9) has been paid to the petitioner, after making several representations, for the period the refund has been kept by the respondents after petitioner's entitlement, the petitioner is entitled to interest on the said amount.
5. Submissions have been made that the provisions of Section 244A(1) of the Income Tax Act,1961 are applicable and based on the said provision the petitioner is entitled to interest.
6. Reliance has been placed on Anjul v. PCIT : WP (C) 1985/2022 decided on 23/8/2022 by Delhi High Court and UPS Freight Services India Pvt. Ltd. v. Deputy Commissioner of Income Act : WP (L) No.10314/2023 decided on 28/8/2023 by the Bombay High Court.
7. A reply to the writ petition has been filed inter alia denying the entitlement of the petitioner to seek any interest on the amount of refund.
8. Submissions have been made that the provisions of Section 244A of Income Tax Act have no application, on the other hand Explanation to Section 7 of the VSV Act, 2020 specifically prohibits grant of any interest and application of provisions of Section 244A of the Income Tax Act and, therefore, the petition deserves dismissal.
9. We have considered the submissions made by learned counsel for the parties and have perused the material available on record.
10. A perusal of Form No. 5 (Annex.9) clearly reveals that the order has been passed by the designated authority under the VSV Act, 2020 and Rules determining the amount of Rs.3,47,03,505/- refundable to the petitioner in accordance with the provisions of the Act. Once the order in Form No. 5 has been issued on 8/3/2021, the petitioner became entitled for the amount of refund. Admittedly, the said amount was refunded to the petitioner/adjustment towards the demands on 22/10/2021, 10/1/2022, 20/1/2022 and 30/5/2022. No reason worth the name has been indicated in response for the delay in refunding the amount to which the petitioner became entitled on passing of order in Form No.5 way back on 8/3/2021.
11. The Delhi High Court in the case of Ms. Anjul (supra) while relying on one judgment of Hon'ble Supreme Court in Union of India v. Tata Chemicals Limited : (2014) 6 SCC 335 held that the State having received the money without right and having retained and used it, is bound to make the party good, just as an individual would do under like circumstances. The obligation to refund money received and retained without right implies and carries with it the right to interest.
12. Bombay High Court in the case of UPS Freight Services (supra) while following the order in the case of Ms. Anjul (supra) also ordered for payment of interest as per the rate prescribed under Section 244A of the Inc
Petitioner entitled to interest on delayed refund from the date of entitlement, despite provisions of VSV Act prohibiting interest prior to refund determination.
The court ruled that interest on delayed refund is due despite provisions of the VSV Act denying such interest, emphasizing accountability for wrongful retention of funds.
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 court held that the Revenue is accountable for delayed refunds and must pay interest despite the exclusion in the Direct Tax Vivad se Vishwas Act, 2020.
The obligation to refund tax amounts includes the right to interest for undue retention, as established in the Direct Tax Vivad se Vishwas Act, 2020.
Provision of law providing for interest on delayed payment of refund would apply to only those cases that fall under the purview of section 40(1) of the VAT Act and to no other. That is the plain eff....
The main legal point established in the judgment is the entitlement of a dealer to receive interest on the refund amount as per the provisions of section 38 of the VAT Act, and the requirement for th....
The main legal point established in the judgment is that the petitioner was entitled to interest on the amount paid under Section 220(2) of the Act as part of the refund under Section 240 of the Act.....
The petitioner is entitled to interest at 6% per annum on delayed refund from the date of application, as per statutory provisions of the Customs Act.
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
