Commissioner Of Trade And Taxes vs. Corsancorviam Construccion Sa Sadbhav Engineering LTD Jv

Held

The Court held that Sub-rule 34(4) of the 2005 Rules was not applicable to the present case. Instead, Section 38(3)(a)(ii) of the 2004 Act was the relevant provision for the assessee's claim. The Court reasoned that the claim for refund was embedded in the return and did not arise from an order that necessitated a fresh claim in Form DVAT-21, as contended by the revenue. Therefore, the assessee was not required to file a separate claim. The Court affirmed the Tribunal's conclusion that the assessee was entitled to interest at the rate of 6% (simple) per annum for the period from September 11, 2015, to August 14, 2020, on the principal amount of Rs. 1,25,60,785/-. The ratio decidendi is that when a refund claim is part of the original return and subsequent orders reduce the demand to nil, interest accrues from the statutory period stipulated for refund processing after return filing, without requiring a fresh claim form, unless specifically mandated otherwise by a different statutory provision. The revenue was directed to pay the interest within four weeks.

Facts

The Commissioner of Trade and Taxes (Revenue) appealed an order dated June 20, 2022, by the Delhi Value Added Tax Appellate Tribunal (Tribunal), which ruled in favour of the assessee, Corsan Corviam Construction S.A.-Sadbhav Engineering Ltd. JV. The assessee sought interest on a refunded amount of Rs. 1,25,60,785/- for the period from September 11, 2015, to August 14, 2020. The assessee filed a revised return on July 10, 2015, for the fourth quarter of FY 2014-15, claiming a refund. A notice under Section 59(2) was issued on September 11, 2015. A notice of default assessment under Section 32 was issued on August 2, 2017, for Rs. 1,25,60,785/-. A partial refund of Rs. 1,30,96,335/- was granted on August 25, 2017. The assessee filed a writ petition, and the High Court directed interest payment for the period between September 11, 2015, and September 14, 2017. The remaining refund of Rs. 1,25,60,785/- was processed after objections were allowed by the Objection Hearing Authority (OHA) on August 26, 2019, and a subsequent writ petition led to a direction for refund processing. The OHA's order on December 6, 2019, reduced the demand to nil and directed the assessee to claim the refund via Form DVAT-21. The refund was paid on August 14, 2020.

Key Issues

1. Whether Sub-rule 34(4) of the Delhi Value Added Tax Rules, 2005, applied to the assessee's claim for interest on the refund of Rs. 1,25,60,785/-, or if Section 38(3)(a)(ii) of the Delhi Value Added Tax Act, 2004, was the applicable provision. The petitioner argued that Section 38(3)(a)(ii) was applicable, entitling them to interest from two months after the return filing date. The revenue contended that Sub-rule 34(4) applied, requiring a fresh claim in Form DVAT-21. 2. Whether the assessee was required to file a fresh claim in Form DVAT-21 for the refund of Rs. 1,25,60,785/-. The petitioner argued that since the refund claim was embedded in the original return and arose from an order that reduced the demand to nil, a fresh claim was not necessary. The revenue argued that the OHA's order explicitly directed the filing of Form DVAT-21. 3. Whether the Tribunal correctly concluded that the assessee was entitled to interest at the rate of 6% per annum for the period between September 11, 2015, and August 14, 2020, on the principal amount of Rs. 1,25,60,785/-. The petitioner argued for the entitlement to interest as per the statutory provisions. The revenue contested the period and the basis for calculating the interest.