VAT refund interest becomes payable when the authority delays payment beyond the statutory period under the refund scheme.

Under the Haryana Value Added Tax Act and Rules, a refund arising from an appellate or revisional order must be claimed through the prescribed application and approved by the prescribed authority, and interest accrues if the refundable amount is not paid within the statutory period, including the 60-day timeline in the scheme. Rule 41(5) and Rule 42 require prompt processing of such refund claims and provide for interest where the authority delays action beyond the stipulated time. On the stated facts, the assessee had filed the prescribed applications, but the refund was sanctioned and paid much later, so simple interest at the statutory rate was payable on the refundable amount.

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Issues: Whether the assessee was entitled to interest on the refunded amount under the Haryana Value Added Tax Act, 2003 and the Haryana Value Added Tax Rules, 2003.

Analysis: The refund mechanism under Section 20 of the Haryana Value Added Tax Act, 2003 requires a prescribed application for refund arising from an appellate or revisional order, followed by approval by the prescribed authority. Interest becomes payable where the refundable amount is not issued within sixty days from the relevant application or approval period contemplated by the statutory scheme. Rule 41(5) and Rule 42 of the Haryana Value Added Tax Rules, 2003 similarly require prompt processing of the refund application and prescribe interest if the authority fails to act within the stipulated time. On the facts, the assessee had made the prescribed applications on 26.5.2010 and 15.4.2011, while the refund was approved and actually delivered much later, beyond the statutory period.

Conclusion: The assessee was entitled to simple interest at the statutory rate on the refundable amount, and the respondents were liable to calculate and pay the interest.

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