JBD Educationals Pvt. Ltd. Vs State of Andhra Pradesh (Andhra Pradesh High Court)
The Andhra Pradesh High Court examined whether a VAT dealer was entitled to interest on a belated tax refund under Section 38 of the Andhra Pradesh Value Added Tax Act, 2005 read with Rule 35(8) of the APVAT Rules, 2005. The petitioner’s refund claim for the tax period April 2013 to March 2016 was approved by the Joint Commissioner on 19.06.2020. However, the actual refund of ₹1,27,34,194 was credited only on 31.03.2022, well beyond the statutory period of ninety days. The petitioner sought interest for this delay, which was rejected by the department through an endorsement dated 23.06.2023.
The department justified the rejection on two grounds: first, that there was no departmental delay as the refund order was passed and the bill forwarded to the treasury within time, and the delay occurred due to CFMS (RBI) system issues beyond departmental control; second, that the period of limitation stood excluded due to the Supreme Court’s suo motu orders extending limitation during the COVID-19 pandemic, and therefore no delay could be attributed.
The Court analysed Section 38 of the APVAT Act and Rule 35(8), particularly clause (c), which mandates payment of interest at 1.25% per month from the expiry of ninety days until the date of actual refund, provided the dealer has complied with requirements. The Court emphasized that the statute clearly uses the expression “date of actual refund” and not the date of passing the refund order. Applying settled principles of statutory interpretation, the Court held that where the language of a taxing statute is plain and unambiguous, it must be interpreted literally, without importing exceptions or equitable considerations.
