Entitlement to interest on delayed tax refund under statutory scheme: interest awarded from due date at six percent.

Entitlement to interest on delayed tax refund under the statutory refund scheme was considered; court applied precedent and statutory mandate to hold that interest accrues from the date refunds become due, and must be computed until the date of actual payment, resulting in interest being calculated up to the refund date of 15 January 2025. The statutory 60-day presumptive refund period after return filing was applied to fix the commencement date of interest from 25 June 2009, at 6% per annum; the assessing authority was directed to compute interest on the refunded amount of Rs.2,87,538 and the petitions were allowed.

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Issues: (i) Whether the petitioner is entitled to interest on the refund of VAT of Rs.2,87,538/- for the quarter ending 31.03.2009 under Section 38(3)(a)(ii) read with Section 42 of the DVAT Act, 2004, and if so, from which date and at what rate.

Analysis: The statutory framework under Section 38(3)(a)(ii) prescribes refund timelines for quarterly filers and Section 42 provides for entitlement to interest on refunds at the rate prescribed by notification, to be computed daily. Rule 34 prescribes the procedural steps for sanctioning refunds and recording calculations. The assessment order dated 01.09.2011 rejecting the refund was not shown to have been served or uploaded on the portal; the appellate authority remanded the matter for fresh adjudication and the assessing authority subsequently allowed the refund, which was credited on 15.01.2025. The petitioner filed the return on 26.04.2009, making 25.06.2009 the date when the refund became due after the statutory 60-day period. The factual record does not establish that delay in processing the refund was attributable to the petitioner, and prior orders preserved the question of limitation and service/upload for adjudication by the appellate authority. Precedent on entitlement to interest for delayed refunds supports the claim.

Conclusion: The petitioner is entitled to simple interest on the refunded amount of Rs.2,87,538/- at the rate of 6% per annum from 25.06.2009 until the date the refund was credited (15.01.2025); the respondent is directed to calculate and pay the accrued interest within 12 weeks.

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