Transporter's challenge to DVAT refund interest calculation under Section 42 dismissed, 6% rate upheld

Delhi HC dismissed writ petition challenging interest calculation on DVAT refund. Petitioner, a transporter not engaged in trading, sought higher interest computation. Court held under Section 42 DVAT Act, interest at statutory rate of 6% p.a. shall be computed from dates of DVAT Appellate Tribunal orders (26.08.2021 for penalty amount Rs. 4,91,096/- and 10.05.2023 for tax Rs. 4,91,096/- plus penalty Rs. 50,000/-) until refund date. GSTO's interest computation dated 31.07.2023 was upheld as correct.

---

---

Issues Involved:
1. Quashing of impugned order dated 31.07.2023 regarding interest calculation.
2. Direction for payment of interest on Rs. 10,32,192/- at 15% from 27.04.2006 to 09.08.2023.

Summary:

Issue 1: Quashing of Impugned Order Dated 31.07.2023
The petitioner sought a writ of certiorari to quash the impugned order dated 31.07.2023, which provided interest from the date of the Tribunal's decision up to the date of passing the order of sanctioning refund. The petitioner argued that the amount deposited was neither a tax nor a penalty under the DVAT Act and was retained illegally for 17 years, thus warranting interest at the market rate. The respondents contended that the term "person" in Sections 38 and 42 of the DVAT Act includes the petitioner, and the interest rate should be as prescribed under the DVAT Act.

Issue 2: Direction for Payment of Interest at 15%
The petitioner also sought a writ of mandamus directing the respondents to pay interest on Rs. 10,32,192/- at 15% from 27.04.2006 to 09.08.2023. The Court noted that the petitioner had availed remedies under the DVAT Act and thus could not challenge its applicability now. The Court held that Sections 38 and 42 of the DVAT Act, which use the term "person" instead of "dealer," apply to the petitioner. The interest should be computed from the date the refund was due, as per the DVAT Appellate Tribunal's orders, at the statutory rate of 6% p.a.

Analysis & Conclusion:
The Court concluded that the provisions of the DVAT Act regarding interest apply to the petitioner, a transporter, and not a dealer. The interest should be computed from the dates of the Tribunal's orders (26.08.2021 and 10.05.2023) at 6% p.a. The petitioner's reliance on cases under the Income Tax Act and Central Excise & Salt Act was found inapplicable. The Court upheld the GSTO's order dated 31.07.2023, computing interest correctly, and dismissed the writ petition. The Revenue was directed to pay the interest as per the impugned order within four weeks.

Result:
W.P. (C) No. 11463/2023 is dismissed.

---