2025 (12) TMI 1734 - HC - VAT / Sales Tax

Sales tax refund after rectified assessment: when six-month clock starts under s. 33-E, interest denied as paid promptly.

Entitlement to interest on delayed refund under ss. 33, 33-A and 33-E of the Andhra Pradesh General Sales Tax Act, 1957 turned on when the statutory ... Delayed refund of tax - Entitlement to interest on the refunded excess tax u/s 33, 33-A and 33-E of the Andhra Pradesh General Sales Tax Act, 1957 - HELD THAT:- The right of the petitioner to claim refund of tax and interest on such refund, if there is a delay in refunding the tax, can be traced to Sections 33, 33-A & 33-E of the Andhra Pradesh General Sales Tax Act, 1957. Section 33-A of the Act, states that the dealer is also entitled to move an application for refund of tax. This application can be moved on or after the date, on which the tax in respect of which the claim is being made, is directed to be refunded. Section 33-E of the Act, stipulates that, any application made for refund of tax should be cleared and the refund should be paid out within six months, from the date on which the claim for refund is made. In the event of any delay beyond the six month period, the dealer would be entitled to interest @ 12% for the period between the expiry of six months, after the filing of the claim till the refund is given. In the present cases, the petitioner became entitled to a refund only after the Commercial Tax Officer, had passed an Order, dated 06.09.2018, on the application made by the petitioner under Rule 50. Thereafter, the refund amount is said to have been paid in October, 2018 itself. If it is to be held that the Order passed under Rule 50 itself gave rise to a refund, the Assessing Authority, at the earliest, had a period of six months for making the said payment. Since the refund was made in October, 2018 within a month of the Order, dated 06.09.2018, there is no delay, which would attract interest @ 12% p.a., as stipulated under Section 33-E of the A.P.G.S.T. Act, 1957. The petitioner would contend that, the application for refund was actually made, after the Orders of the Hon’ble Supreme Court had been passed and as such, there is a delay in refund, which would entitle the petitioner for interest. This Court is unable to accept this contention, in the face of the language of Sections 33 & 33-E of the Act. The starting point for making any payment, on the ground of refund, would arise only after an Order of Assessment, gives rise to a refund. In the present cases, such a situation would arise, only upon the passing of the Order of Rectification, under Rule 50, on 06.09.2018. Since the refund had been made in October, 2018 itself, there is no delay, which would attract interest u/s 33-E of the A.P.G.S.T. Act, 1957. There are no merit in the present set of Writ Petitions - petition dismissed. Issues: Whether the petitioner is entitled to interest on taxes refunded where the refund arose on the Assessing Authority's order dated 06.09.2018 and the refund was paid in October 2018.Analysis: The entitlement to refund and interest is governed by Sections 33, 33-A and 33-E of the Andhra Pradesh General Sales Tax Act, 1957. Section 33 contemplates refund where tax paid is in excess; Section 33-A prescribes the form and limitation for claims; Section 33-E mandates payment of interest at the prescribed rate where the refund is not granted within six months from the date the claim for refund is made, excluding any period attributable to the assessee. In the present matter the refund obligation arose on the Assessing Authority's order under Rule 50 dated 06.09.2018, and the refund was paid in October 2018, i.e. within the six month period stipulated by Section 33-E. Consequently there was no delay attracting interest under Section 33-E.Conclusion: The petitioner is not entitled to interest on the refunded amounts.