United Spirits LTD. (Erstwhile Mcdowell And Co. LTD.), Rep. By Its Officer, Suraj Shenvi Pilgaonkar vs. State Of Goa, Through The Chief Secretary And 4 Ors.

Held

The Court held in favour of the Petitioner regarding the entitlement to statutory interest. On the first issue, the Court directed the Respondents to pay simple interest at 8% per annum on the sanctioned refund amount of Rs. 1,08,13,087.86 for interstate/local sales for the period between July 1, 2012, and February 20, 2016, within eight weeks. On the second issue, the Court directed the Respondents to pay simple interest at 8% per annum on the sanctioned refund amount of Rs. 85,58,747.14 for export sales, calculated on a proportionate basis from the expiry of 90 days after the receipt of refund applications (July 25, 2008; October 22, 2008; January 21, 2009; April 17, 2009) until February 20, 2016, also within eight weeks. The Court's reasoning for these directions was based on its prior judgment in Writ Petition No. 424 of 2018, which addressed similar issues concerning the commencement date of interest liability under the Goa Value Added Tax Act, 2005. For the third issue concerning the VAT input tax credit, the relief was presently denied. However, the Petitioner was granted liberty to pursue this claim before the Adjudicating Authority, who was directed to dispose of the proceedings within four months. The Petitioner retained the right to take further appropriate proceedings if aggrieved by the Adjudicating Authority's decision. The issue of costs was not pressed.

Facts

The Petitioner, United Spirits Ltd., filed a writ petition seeking statutory interest on certain refund amounts. The primary dispute concerned the date from which simple interest at 8% per annum, as stipulated under Section 33(2) of the Goa Value Added Tax Act, 2005, became payable on amounts refundable under the Act. The Petitioner claimed interest on Rs. 1,08,13,087.86 for the period July 1, 2012, to January 31, 2016, and on Rs. 85,58,747.14 for four quarters of 2008-2009, calculated 90 days after logging refund claims under Section 10(3). Additionally, the Petitioner sought Rs. 12,45,770.32 as VAT input tax credit on export sales against a restrictive tax invoice. The Court referred to its prior judgment in a related writ petition filed by the same Petitioner.

Key Issues

1. Whether the Petitioner is entitled to statutory interest at the rate of 8% per annum on the sanctioned refund amount of Rs. 1,08,13,087.86 for the period between July 1, 2012, and February 20, 2016, as per Section 33(2) of the Goa Value Added Tax Act, 2005? 2. Whether the Petitioner is entitled to statutory interest at the rate of 8% per annum on the sanctioned refund amount of Rs. 85,58,747.14 for the specified periods in 2008-2009, calculated 90 days after the date of logging the claim under Section 10(3) of the Goa Value Added Tax Act, 2005? 3. Whether the Petitioner is entitled to Rs. 12,45,770.32 as VAT input tax credit on export sales against a restrictive tax invoice? Petitioner's Arguments: The Petitioner contended that they were entitled to the claimed statutory interest on the refund amounts based on the provisions of the Goa Value Added Tax Act, 2005. They relied on the principle that interest accrues from the date the refund becomes due or from the expiry of the statutory period for processing refunds. Revenue's Arguments: The Revenue did not record specific arguments against the Petitioner's claims for interest. However, the Court's decision implies that the Revenue's stance on the commencement date of interest liability was contested.