Statutory interest on delayed VAT refund follows when the refund is released after the prescribed period.

Refund due under the Haryana Value Added Tax Act, 2003 carries statutory interest where payment is delayed beyond the prescribed period, and the refund approval process cannot be used to postpone that consequence. The High Court noted that a Division Bench had already held that interest follows when a refund found due on assessment or in appellate proceedings is released after the statutory time limit. Applying that principle, the refund had been claimed on 22.04.2016, was found due by the assessing authority, and was released only on 28.08.2019. Interest at the prescribed rate was therefore payable for the period of delay.

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Issues: Whether the petitioner was entitled to interest on the refund amount of Rs. 62,01,371/- for the period during which the refund remained unpaid.

Analysis: Section 20 of the Haryana Value Added Tax Act, 2003 governs refund, approval, and interest on refundable amounts. A refund found due on assessment or pursuant to appellate proceedings attracts the statutory interest consequence where payment is not made within the prescribed period. The earlier Division Bench view in the same statutory setting held that the approval mechanism under the refund rules cannot be used to defeat the statutory period for payment without interest, and that interest follows when the refund is released beyond that period. In the present case, the refund was held due by the assessing authority and was ultimately released only on 28.08.2019, whereas the application for refund had been made on 22.04.2016.

Conclusion: The petitioner was entitled to interest on the refund amount at the prescribed rate for the period from 22.04.2016 till 28.08.2019.

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