Delayed tax refund cannot be treated as dealer default; interest demand fails where authorities miss statutory timelines.

Interest under the Maharashtra Value Added Tax Act was analysed in the context of a refund application filed within time but decided only after the statutory period. Reading sections 30(2), 50 and 51 together, the delayed refund process and consequential direct credit could not be treated as a default by the dealer where the refundable amount was already with the department and the delay arose from the authority's failure to act within time. On that reasoning, section 30(2) was held inapplicable on the stated facts and the interest demand was unsustainable; the impugned demand notice was quashed.

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Issues: Whether interest under the Maharashtra Value Added Tax Act, 2002 could be levied on the dealer for alleged delay in payment when the refund application was filed in time but the refund was granted after the statutory period, and whether the delayed refund could be treated as non-payment attracting the interest provision.

Analysis: The application for refund was made before the amendment to section 51, and the Commissioner was required to call for additional information, if any, within one month and to pass the refund order within the prescribed period. The additional information was called only after several months and the refund order was passed much later, entirely beyond the statutory time limit. Reading sections 30(2), 50 and 51 together, the delayed refund and consequential direct credit could not be treated as a default by the dealer, because the amount refundable was already lying with the department and the delay was attributable to the refund 's failure to act within time.

Conclusion: Section 30(2) had no application on the facts, the demand of interest was unsustainable, and the impugned demand notice was quashed in favour of the assessee.

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