2024 (1) TMI 513 - SCH - VAT and Sales Tax

Supreme Court mandates refund with 6% interest for delays under JVAT Act, enforcing strict compliance within four weeks.

The SC addressed a delay in refund payment and the application of interest under Section 55 of the JVAT Act. It mandated the payment of a refund with 6% ... Interpretation of statute - time limitation - Rejection of refund claim - HELD THAT:- There has been a continuing lapse on the part of the petitioners herein. In the circumstances, the interest of justice would be sub-served, if interest @ 6% on the refund amount is directed to be paid w.e.f. 26.04.2023 till the date of realisation in the instant case. It is needless to observe that the aforesaid refund amount with interest shall be paid within a period of four weeks from today without seeking any extension of time either before this Court or before the High Court. SLP disposed off. Issues involved: Delay in refund payment, application of interest u/s Section 55 of the JVAT Act, compliance with court orders.Summary:Issue 1: Delay in refund paymentThe Supreme Court considered a case where a Co-ordinate Bench had directed a refund to a respondent, but the interest on the refund amount was not quantified. The High Court had ordered the refund to include interest, but the quantification was missing. The Supreme Court directed the payment to be made within four weeks without seeking an extension, emphasizing compliance with court orders.Issue 2: Application of interest u/s Section 55 of the JVAT ActThe respondent argued that interest should be paid as per Section 55 of the JVAT Act, starting 90 days after the refund application. The High Court had set aside the rejection of the refund application and referred to the payment of interest as per the JVAT Act. The Supreme Court agreed that 6% interest should be paid from 26.04.2023 till realization, highlighting the importance of complying with statutory provisions.Issue 3: Compliance with court ordersThe petitioner contended that no direction for interest payment was made in a previous order involving the same parties. They argued against the application of Section 55 of the JVAT Act, citing administrative delays in processing the refund application. However, the Supreme Court found a continuing lapse in compliance by the petitioners and ordered the payment of interest at 6% on the refund amount till realization, emphasizing the importance of adhering to court directives.Conclusion:The Supreme Court disposed of the Special Leave Petition, directing the payment of the refund amount with interest within four weeks without seeking an extension, considering the specific circumstances and the need for compliance with court orders.