2016 (11) TMI 610 - HC - VAT and Sales Tax

Tribunal grants interest on enhanced refund, excludes interest on interest.

The Gujarat Value Added Tax Tribunal affirmed that interest on the additional refund payable to the assessee by virtue of the appellate order should be ... Interest on additional refund granted - the first appellate authority had computed total amount payable to ONGC at ₹ 1,66,38,658/- in place of ₹ 1,20,90,342/- calculated by the Assessing Officer payable to ONGC by way of refund. Thus, under this appellate order, the ONGC would receive an additional sum of ₹ 45,48,316/- - Held that: - the assessee would receive interest on enhanced refund as per the appellate order. Prima facie, it is not suggested that the assessee would be entitled to interest on interest. Only for such clarification therefore, we would not issue notice calling upon the respondent to appear, instead we leave it to the Government to approach the Tribunal, if so desire, seeking clarification or rectification in terms of powers under sub-section (2) of Section 79 of the VAT Act - application disposed off - decided in favor of applicant. Issues:1. Calculation of interest on additional refund arising from an appellate order.Analysis:The State filed an appeal against the Gujarat Value Added Tax Tribunal's judgment, questioning the allowance of interest on a refund granted to the respondent due to an appellate order. The Tribunal affirmed that interest on the additional refund payable to the assessee by virtue of the appellate order should be granted. The Tribunal held that the appellant is entitled to interest on the refund granted not only due to the assessment order but also as a result of the appellate order. The assessing officer was directed to recalculate the interest accordingly. The Tribunal clarified that the appellant would receive interest on the enhanced refund as per the appellate order. The State's grievance was that the interest amount calculated at the appellate stage should not receive further interest, as contended by the learned AGP. The judgment did not suggest that the assessee would be entitled to interest on interest.The Tribunal's order emphasized that interest on the refund granted to the appellant should be provided not only due to the assessment order but also because of the appellate order. The judgment highlighted that the appellant would receive interest on the enhanced refund as per the appellate order. The State's contention that the interest amount calculated at the appellate stage should not receive further interest was considered, and it was observed that the Tribunal did not state anything contrary to this argument. The judgment clarified that the appellant would not be entitled to interest on interest. The appellant was directed to approach the Tribunal for any necessary clarification or rectification under the powers granted by the VAT Act. The Tax Appeal, along with the OJ Civil Application, was disposed of with these observations.