Century Plyboards (INDIA) Limited vs. State Of Chhattisgarh

Facts

The petitioner, Century Plyboards (India) Limited, is registered under GST and engaged in manufacturing and trading of plywood and related products. The Assessing Officer initially raised a demand of Rs. 58,55,865/- (VAT) and Rs. 3,45,479/- (Entry Tax) for the quarter ending June 30, 2017. This amount was deducted from the petitioner's bank account on March 27, 2021. Subsequently, a reassessment order dated June 18, 2024, reduced the VAT demand to Rs. 68,799/- and Entry Tax to Rs. 70,464/-. After adjusting the revised tax, the petitioner was entitled to a refund of Rs. 60,62,081/-. Representations for refund were made on March 15, 2025, and a reminder on March 28, 2025. The refund was credited to the petitioner's bank account on October 31, 2025, after the writ petition was filed.

Held

The Court held that the petitioner is entitled to statutory interest on the refund amount of Rs. 60,62,081/-. The reassessment order was passed on June 18, 2024. Although the State argued that no proper representation was made, the Court noted that representations were indeed made on March 15, 2025, and a reminder on March 28, 2025. The Court found that the respondent authorities should have taken prompt action after receiving these representations. The refund was ultimately processed after the filing of the writ petition, and the authorities exercised their power under Section 39(5) of the Act, 2005, and Rule 47 of the Chhattisgarh Value Added Tax Rules, 2006, suo motu. The Court ruled that as per Section 39(5) of the Act, 2005, the petitioner is entitled to interest at 0.5% per month on the excess amount if not paid within the stipulated time. Therefore, the petitioner is entitled to interest on Rs. 60,62,081/- from March 20, 2025 (the date of receipt of the representation) until the actual payment date of October 31, 2025. The interest is to be paid within 30 days of the order.

Key Issues

1. Whether the petitioner is entitled to statutory interest on the refund amount of Rs. 60,62,081/- from the date of the reassessment order until the actual date of payment, as per Section 39(5) of the Chhattisgarh Value Added Tax Act, 2005 (Act, 2005)? The petitioner argued that the reassessment order dated June 18, 2024, made them eligible for the refund, and since it was credited over a year later on October 31, 2025, they are entitled to statutory interest at 0.5% per month. The respondent State argued that the petitioner failed to move an application under Section 56 of the Act, 2005, and that the representation on March 15, 2025, was not made before the appropriate authority. They also contended that the refund order was passed under Section 39(5) of the Act, 2005, read with Rule 47 of the Rules, 2006, immediately after the petitioner's bank details were updated.