Refund verification under Maharashtra VAT cannot be delayed indefinitely once a bank guarantee is furnished.

Section 51 of the Maharashtra Value Added Tax Act permits the Commissioner to seek a bank guarantee and further information from dealers covered by Section 51(3), but once the guarantee is furnished the refund due must be granted within one month under the non obstante clause, even if additional information remains pending. The provision allows reasonable verification to protect public revenue, and excess refund can later be recovered with interest if the amount found due is lower. The scheme therefore permits scrutiny, but not indefinite delay; the authorities were directed to complete verification expeditiously and process any refund found payable provisionally and preferably within one month.

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Issues: Whether, in the case of a dealer covered by Section 51(3) of the Maharashtra Value Added Tax Act, 2002 and having furnished a bank guarantee, the refund application could be kept pending indefinitely and whether the authorities were bound to take an expeditious decision and grant the refund provisionally in accordance with law.

Analysis: Section 51 creates a general refund mechanism, but for specified dealers falling under Section 51(3) it permits the Commissioner to seek a bank guarantee and additional information. The non obstante clause in Section 51(5) is material: once the bank guarantee is furnished, the Commissioner is required to grant the refund due within one month, irrespective of whether additional information has been furnished. At the same time, the provision does not exclude a reasonable verification of entitlement, since refunds concern public revenue and the authority remains entitled to ensure that the claim is not misused. Section 51(6)(b) protects the revenue by enabling recovery of excess refund with interest if the amount later found due is lower. The statutory scheme therefore permits verification, but not indefinite delay.

Conclusion: The authorities were directed to complete verification expeditiously and to grant any refund found due and payable in accordance with law, provisionally and preferably within one month, leaving the claim for interest open to be pursued separately.

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