The assessing authority must refund excess tax with interest after 90 days per Section 89 of the Kerala Value Added Tax Act.

JUDGMENT

The petitioner was a registered dealer under the provisions of the Kerala Valued Added Tax Act. The grievances highlighted by the petitioner in this writ petition relate to the denial of interest while making the refund of the excess tax collected from the petitioner.

2. The facts that led to the filing of this writ petition are as follows: Pertaining to the assessment year 2006-2007, Ext.P2 Revenue Recovery Notice was issued by the Commercial Taxes Department. The petitioner challenged Ext.P2 demand before this Court, by filing W.P.(c.)No.27736 of 2014. As per Ext.P3, an interim order was passed by this Court, granting stay of the coercive proceedings, subject to the condition that, the petitioner shall deposit an amount equivalent to 30% of the disputed liability, within two weeks. In compliance with the said condition, the petitioner had deposited an amount of Rs.11,99,754/- as evidenced by Exts.P4(a)

and P4(b).

3. Later, the said writ petition was disposed of, along with a batch of writ petitions as per Ext.P5 Judgment , wherein, this Court found that the demand made as per Ext.P2 was beyond the period of limitation contemplated under the provisions of the Kerala Value Added Tax Act and therefore not legally sustainable. Based on the said finding, Ext.P2 demand notice was quashed. Ext.P5 Judgment was rendered on 05.10.2016.

4. The State challenged Ext.P5 by filing W.A. No.1184/2013 , but, the said writ appeal was dismissed as per Ext.P6 judgment dated 05.07.2018, confirming the judgment of the learned Single Judge. Even though the matter was taken up to the Hon’ble Supreme Court by the State, as per Ext.P7 Judgment dated 02.08.2023, the appeal was rejected, and thus Ext.P5 Judgment of the learned Single Judge has become final. Thereafter, the petitioner submitted an application for the refund of the amount paid by the petitioner, towards Ext.P2 demand, based on the interim order passed by this Court. Since the applications and requests submitted by the petitioner in this regard were not considered by the authorities, the petitioner approached this Court, by filing W.P.(c.) No.339 of 2024, which resulted in Ext.P12 Judgment . In the said judgment, this Court disposed of the writ petition directing the 5^th respondent therein, who is the 5^th respondent herein, to take a decision on the application submitted by the petitioner for the refund of the pre-deposit amount of Rs.11,99,754/- within a period of two months in accordance with law.

5. In compliance with the said directions, the 5^th respondent vide Ext P1, ordered the release of an amount of Rs.11,99,754/-, dated 11.04.2024. The grievance of the petitioner is that, as per Ext.P1, the respondents have released only the principal amount, whereas, Section 89 contemplates a refund of the amount along with the interest at 10% per annum. Since the same was not released to the petitioner, this writ petition is submitted seeking a direction to release the amount of interest.

6. A detailed counter affidavit has been submitted by the 4th respondent in response to the averments contained in this writ petition. In the said counter affidavit, the 4th respondent denied the right of the petitioner to get the interest from the date of Ext.P5 Judgment .

7. I have heard Sri. Jose Varkey Vithayathil, learned counsel for the petitioner, and Sri.Arun Jayasankar, learned counsel for the respondent.

8. The only question that arises for consideration is whether the petitioner is entitled to get the interest for the belated refund of the amount. Section 89 of the Kerala Value Added Tax Act is the relevant provision that is applicable