Statutory interest on delayed tax refund survives investigation and dispute where the assessee did not cause the delay.

Under the Delhi Value Added Tax Act, 2004, refund processing must follow the statutory time frame, and once the refund becomes due the assessee is entitled to simple interest until actual payment, save for delay attributable to the assessee alone. The return itself constituted the refund claim, and there was no material showing that the assessee caused the delay. Investigation and pending legal dispute did not extinguish the statutory right to interest, because later success only removed the obstacle to refund. The denial of interest on that basis was therefore unsustainable, and statutory interest on the delayed refund was payable.

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Issues: Entitlement to interest on delayed refund under the Delhi Value Added Tax Act, 2004, and whether the claim could be denied because the refund had remained under investigation and legal dispute.

Analysis: Section 38 of the Delhi Value Added Tax Act, 2004 prescribes a mandatory time frame for processing refunds and makes the refund payable after the stipulated period in the case of a quarterly return. Section 42 provides that an assessee entitled to refund is also entitled to simple interest from the date the refund became due till the date of actual payment, and the delay attributable to the assessee alone can be excluded. The return itself constituted the refund claim, and there was no material to show that the petitioner caused the delay. The subsequent proceedings and withholding of refund did not extinguish the statutory entitlement to interest, and the later success of the assessee only removed the obstruction to refund.

Conclusion: The petitioner was entitled to statutory interest on the delayed refund, and the rejection of interest on the ground of investigation and legal issues was unsustainable.

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