M/S Kahlon International vs. State Of Punjab And Another

Held

The High Court, without expressing any opinion on the merits of the case, disposed of the present writ petition. The Court directed respondent No.2 to take a decision on the petitioner's letter dated September 4, 2018, within a period of one month from the date of receipt of the certified copy of the order. This decision must be made in accordance with the law and by passing a speaking order, after affording an opportunity of hearing to the petitioner. The Court did not decide on the petitioner's entitlement to interest on the delayed VAT refund, leaving this substantive issue for respondent No.2 to adjudicate.

Facts

The petitioner, M/s Kahlon International, engaged in manufacturing nuts and bolts, filed returns for financial years 2009-10, 2012-13, 2015-16, and 2016-17. The petitioner was entitled to Input Tax Credit (ITC) on purchases made within Punjab and applied for a refund of ` 28,49,484/-. After the refund was not processed, the petitioner filed CWP-14793-2018, which was disposed of on June 1, 2018, directing the respondent to decide the refund application. The refund amount was credited without interest. The petitioner then sent a letter on September 4, 2018, to respondent No.2 seeking interest on the delayed VAT refund, but received no response. This led to the filing of the present writ petition.

Key Issues

1. Whether the petitioner is legally entitled to interest on the delayed payment of VAT refund of ` 28,49,484/-, as per the relevant provisions of the Punjab Value Added Tax Act, 2005, and any applicable rules or circulars? The petitioner argued that they are entitled to interest on the delayed refund, having followed the prescribed procedure and having already secured the principal refund amount after a previous writ petition. The petitioner relied on their letter dated September 4, 2018, to respondent No.2 for claiming this interest. The respondents' arguments are not recorded in the judgment.