Telangana HC Directs Refund Consideration for Long-Pending VAT/CST Refund Claim

Bajaj Electricals Limited Vs Deputy Commissioner (ST) STU-1 (Telangana High Court)

The Telangana High Court entertained a writ petition filed by Bajaj Electricals Limited seeking refund of ₹93.86 lakh allegedly due under various assessment and appellate orders passed under the Telangana Value Added Tax Act, 2005 (TVAT Act) and the Central Sales Tax Act, 1956 (CST Act). The petitioner contended that despite favorable orders and entitlement to refund, the State Tax authorities failed to release the amount along with statutory interest.

Introduction

In M/s. Bajaj Electricals Limited v. Deputy Commissioner (ST) & Others, the petitioner approached the Telangana High Court under Article 226 of the Constitution of India challenging the inaction of the State Tax Department in granting refund of amounts arising out of multiple orders passed under the erstwhile VAT and CST regimes.

The case raises an important issue regarding the obligation of tax authorities to process and release legitimate refund claims within a reasonable period and in accordance with statutory provisions.

Facts of the Case

The petitioner, M/s. Bajaj Electricals Limited, claimed that a sum of ₹93,86,172/- had become refundable pursuant to several orders passed under the TVAT Act, 2005 and CST Act, 1956, including:

• A.O. No.2053 dated 28.01.2017
• A.O. No.48057 dated 10.12.2018
• A.O. No.80499 dated 16.12.2020
• A.O. No.56161 dated 16.06.2020
• A.O. No.8876 dated 28.03.2022
• A.O. No.811 dated 31.07.2024

According to the petitioner:

• The refund amount remained unpaid despite the orders becoming effective.
• The authorities failed to process and release the refund.
• Such inaction was arbitrary and contrary to the provisions governing refunds under the TVAT Act and CST Act.
• The petitioner was also entitled to statutory interest on the delayed refund.

An interlocutory application was also filed seeking an interim direction for immediate refund pending disposal of the writ petition.