Case Law Details
State Of Jharkhand & Ors. Vs Kirloskar Brothers Limited (Supreme Court of India)
Introduction: In a significant verdict, the Supreme Court of India, in the case of State of Jharkhand & Ors. vs Kirloskar Brothers Limited, has directed the payment of interest at 6% on the refund amount under Section 55 of the Jharkhand Value Added Tax Act, 2005 (JVAT Act). The judgment builds upon a previous order dated 28.11.2023, setting the tone for the resolution of disputes related to the refund of the principal amount.
Detailed Analysis: The case revolves around the respondent’s application for refund under the JVAT Act, which was initially rejected and subsequently set aside by the High Court. The Supreme Court, while considering the matter, referred to its earlier order dated 28.11.2023, where it refused to interfere with the direction to refund the principal amount but set aside the payment of interest, citing lack of quantification.
The respondent argued that, unlike the previous case, specific reference to Section 55 of the JVAT Act was made in their matter. Section 55 stipulates the payment of interest for the period starting 90 days after the application for refund. The delay in processing the application, exceeding three years, and subsequent rejection by administrative reasons were highlighted. The High Court, acknowledging the legislative intent, ordered the payment of 6% interest from the lapse of 90 days after the refund application.
The petitioner contested, urging consistency with the earlier order and claiming that the respondent failed to apply for a refund within the stipulated 90 days. Despite the rejection being overturned, they argued against interest from the lapse of the 90-day period.
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