APVAT: HC directs Revenue to grant refund of excess payment along with interest due to delay

Venkateswara Electricals Vs State of Andhra Pradesh (Andhra Pradesh High Court)

HC Directs Revenue Department to grant refund of the excess payment along with the interest due to delay

The Hon’ble Andhra Pradesh High Court in M/s Venkateswara Electricals v State of Andhra Pradesh [Writ Petition No. 4072 of 2022 dated March 9, 2022] directed the Revenue Department to refund the amount of the excess tax paid by the assessee, along with the interest, within a period of three months.

Facts:

M/s Venkateswara Electronic (“the Petitioner”) on January 23, 2020, made an application for refund of INR 21,55,781/- w.r.t. excess tax paid on sales or purchases of goods for the period April, 2014 to June, 2017, which was approved and forwarded to Joint Commissioner, Andhra Pradesh (“the Respondent”) for arranging the refund to the Petitioner.

Subsequently, an order dated March 25, 2021 was passed by the Respondent, accepting the refund claim by the Petitioner. However, no communication received from the Respondent with regard to refund of the amount, though nearly a year has lapsed from the date of application for refund. Hence, this writ petition.

The Petitioner contended that as per Section 38 (1)(a) of the AP Value Added Tax Act, 2005 (“the APVAT Act”), a refund is to be made within 90 days from the date of claim made by the dealer. However, the claim was made nearly a year ago, but, no amount has been released or credited to the account of the Petitioner.

Issue:

• Whether the Respondent is liable to refund the excess payment claim of the Petitioner, along with interest?

Held:

The Hon’ble Andhra Pradesh High Court in Writ Petition No.4072 of 2022 dated March 9, 2022 held as under:

• Analysed Section 38 (1)(a) of the APVAT Act, and noted that, a refund is to be made within 90 days from the date of claim made by the Petitioner, but no amount has been released or credited to the account of the Petitioner, nearly a year has lapsed.
• Directed the Respondent to refund the amount to which the Petitioner is entitled along with the interest, within a period of three months.

FULL TEXT OF THE JUDGMENT/ORDER OF ANDHRA PRADESH HIGH COURT

Heard learned counsel for the petitioner and learned Government Pleader for Commercial Taxes, for respondent nos.1, 2, 3 & 5 and with their consent, the Writ Petition is disposed of at the admission stage.

2. The present Writ Petition came to be filed seeking a direction to the respondents to refund a sum of Rs.21,55,781/- along with interest due thereon @ 1.25% per month in terms of Clause (c) of Sub-Rule (8) of Rule 35 of the APVAT Rules.

3. The averments made in the affidavit filed, in support of the Writ Petition would show that on receipt of Assessment Order of the Commercial Tax Officer (Audit), the petitioner made an application for refund on 23.01.2020. On receipt of a notice for claim of refund from the office of Commercial Taxes, in Form VAT 351 dated 09.12.2020, the petitioner submitted confirmation of claim of refund in Form VAT 352 on 14.12.2020. It is said that the Commercial Tax Officer approved the refund in Form VAT 355A on 15.12.2020, which was found to be correct by the Deputy Commissioner (CT), Visakhapatnam. The same was forwarded to Joint Commissioner (CT)[DMU & VAT Refunds], Andhra Pradesh, Vijayawada, for arranging the refund to the petitioner.

(a) It is said that the Joint Commissioner passed an order on 25.03.2021, accepting the orders of refund of the amount for the period April, 2014 to June, 2017, for Rs.21,55,781/-. But, it is now alleged that no communication was received from the respondent no.4 with regard to refund of the amount, though nearly a year has lapsed from the said date. Challenging the inaction lead to filing of the present Writ Petition.

4. It is to be noted here that as per Section 38 (1)(a) of the APVAT Act, 2005, a refund is to be made within 90 days from the date of claim made by the dealer. As stated above, the claim was made nearly a year. But, no amount has been released or credited to the account of the petitioner. The plea urged by the respondents is that they are awaiting fund clearance for refund of the amount.

5. Having regard to the above, the Writ Petition is disposed of directing the respondents to refund the amount which the petitioner is entitled to with interest calculated therein as per the provisions of Section 38 (1)(a) of APVAT Act, 2005 r/w. Sub-Section 6 of APVAT Rules, 2005, within a period of three (3) months from the date of receipt of this order. There shall be no order as to costs.

Miscellaneous petitions pending, if any, shall stand closed.

(Author can be reached at info@a2ztaxcorp.com)