Point of Law: 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 effect of sub-section (2) of section 40 of the VAT Act.

JUDGMENT :

1. Heard Sri. Santosh Kumar Bagaria, learned Senior Advocate, assisted by Sri. Sujeet Kumar and Ms. Chhaya Gupta, learned counsel for the petitioner and Sri. C.B. Tripathi, learned Special Counsel appearing for the revenue.

2. By means of these four writ petitions, the petitioner has sought payment of interest on the alleged delayed payment of refund due to it under section 40(2) of the U.P. Value Added Tax Act, 2008 (hereinafter referred to as the ‘VAT Act’) for A.Ys. 2004-05, 2005-06, 2006-07 and 2007-08. Individual writ petitions have been filed for each assessment year. Brief details of the writ petitions are as below:

3. Though the aforesaid refund claimed were granted to the petitioner vide orders dated 29.06.2020, by further communications dated 07.07.2020 and 11.08.2020 issued by the Deputy Commissioner, Commercial Tax, Sector-3, Prayagraj, the said authority had adjusted the amount of refund quantified at Rs. 17,45,68,741/- for A.Ys. 2004-05 (beginning 14.10.2004) to 2007-08 (ending 31.12.2007), claimed by the petitioner under the provisions of U.P. Trade Tax Act, 1948 (hereinafter referred to as the ‘Erstwhile Act’) against the outstanding demand of interest due on delayed payments of entry tax Rs. 18,10,01,347/- for A.Ys. 2003-04 and 2009-10 under the U.P. Tax on Entry of Goods into Local Areas Act, 2007 (hereinafter referred to as the ‘Entry Tax Act’).

4. The petitioner challenged the aforesaid adjustment of refund by means of Writ Tax No. 748 of 2020. It was heard and decided on 16.11.2021. That hearing proceeded on an admission made by the revenue that the claim for refund made by the petitioner [as was dealt with vide communications dated 29.06.2020, 07.07.2020 and 11.08.2020 by the Deputy Commissioner, Commercial Tax, Sector-3, Prayagraj (impugned in that writ petition)] arose and was decided in accordance with the provisions of the VAT Act.

5. Though reference had been made to the provisions of the Erstwhile Act, no doubt was expressed by either party to the eligibility of refund claimed by and granted to the petitioner under the provisions of the VAT Act or to the applicability of that enactment. In view of such concession made by the State, the issue of applicability of the VAT Act to the refund claimed by the petitioner, was assumed to exist. Therefore, and as would be discussed later, on that issue the said decision would remain confined as a decision obtaining on the facts of that case.

6. By means of the present petitions, the issue of interest on the refund claim alone has been raised. Therefore, it must be tested on its own merits. The facts involved in the present case insofar as they are common to the earlier M/s Birla Corporation Limited vs. State of U.P. and Others, Writ Tax No. 748 of 2020, as have also been recorded in the order dated 16.11.2021, are quoted below:

“5. In brief, the petitioner set up a unit to manufacture cement using fly ash as a raw material. At the relevant time, on 18.06.1997, the Government of U.P. (in exercise of its power under section 5 of the Erstwhile Act), had issued a rebate notification granting rebate on payment of tax under the Erstwhile Act, to eligible units, for a period of ten years. Admittedly, the petitioner was granted that benefit for the period 14.12.1998 to 13.12.2008. Mid-way into that scheme, the said rebate notification came to be rescinded on 14.10.2004, by the State Government. Consequently, for the period 14.10.2004 to 13.12.2008, no rebate was allowed to the petitioner under the Erstwhile Act. Consequently, tax payments were made.

6. The notification dated