Delayed VAT refund attracts statutory simple interest when payment is made after the prescribed period.

A refund under the Haryana Value Added Tax Act had to be processed on a prescribed application and paid within sixty days under Section 20 read with Rules 41 and 42; failing that, simple interest at one per cent per month became payable. Where the assessee filed the refund application and the sanctioned refund was released after the statutory period, the delay attracted the statutory interest consequence. The argument that the voucher had been prepared earlier but reached later did not displace the time limit, because the refund was not made within sixty days of the application date. Interest on the refunded amount was therefore allowed.

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Issues: Whether the assessee was entitled to interest on the refunded amount under the refund provisions of the Haryana Value Added Tax Act and Rules, where the refund was processed after the prescribed period.

Analysis: The refund scheme under Section 20 of the Haryana Value Added Tax Act, 2003 and Rules 41 and 42 of the Haryana Value Added Tax Rules, 2003 requires a prescribed application for refund, approval by the competent authority, and refund within sixty days of the relevant application. Where the refund is not made within that period, the statute mandates simple interest at one per cent per month. On the facts found, the assessee had moved the refund application and the refund was sanctioned and ultimately paid after expiry of the statutory period. The contention that delay occurred because the refund voucher was prepared earlier but received later did not alter the statutory consequence, since the refund was not made within sixty days from the application date.

Conclusion: The assessee was entitled to simple interest on the refunded amount for the period of delay, and the claim for interest was allowed.

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