Commissioner of Trade and Taxes vs Femc Pratibha Joint Venture

Court

Supreme Court of India

Date

1 May 2024

Case No.

Civil Appeal No. 3940 of 2024

Result

Dismissed

Bench

Pamidighantam Sri Narasimha, Prasanna Bhalachandra Varale

Citation

[2024] 6 S.C.R. 337 : 2024 INSC 364

Headnote

Issues for Consideration

(1) Whether the timeline for refund prescribed under s. 38(3) of the Delhi Value Added Tax Act, 2004 must be mandatorily followed while recovering dues under the Act; and

(2) Whether the Tax Assessing Officer could pass an adjustment order to adjust Respondent’s claim for refund against default notices issued subsequently.

Headnotes†

Tax-VAT – Delhi Value Added Tax Act, 2004. – ss. 38(3) and 42 – Respondent claimed refund of excess tax credit along with interest for 4th quarter of 2015-2016 and 1st quarter of 2017-2018 – Appellant did not refund – Issued adjustment order against dues under four default notices issued in 2020, 2021 and 2022 – Adjustment order quashed by High Court – Appellant directed to refund with interest – High Court’s judgment affirmed. Held: Respondent claimed refund of excess tax credit along with applicable interest under Delhi Value Added Tax Act, 2004, s. 42, for the 4th quarter of 2015-2016 and 1st quarter of 2017-2018 through return filed on 29.03.2019 – Appellant did not refund until 2022 – Adjustment order issued to adjust Respondent’s claims against four default notices issued in 2020, 2021 and 2022 – Adjustment order challenged in High Court and is quashed – High Court’s judgment affirmed.

Language of s. 38(3) of 2004 Act is mandatory – Timeline stipulated must be adhered to – Object of provision to ensure refunds are processed and issued in a timely manner – Adjustment under s. 38(2) permitted only against amounts ‘due under the Act’ – Appellant not justified in retaining refund amount and adjusting it towards notices issued subsequent to the refund period – Effect of timeline under s. 38(3) not only for calculation of interest under s. 42 – Contention rejected. [Paras 6-10]

Case Law Cited

Judgment / Order of the Supreme Court Judgment Pamidighantam Sri Narasimha, J. 1. The issue for consideration before us is whether the timeline for refund under Section 38(3) of the Delhi Value Added Tax Act, 20041 must be mandatorily followed while recovering dues under the Act by adjusting them against the refund amount. 2. The brief facts relevant for our purpose are as follows. The respondent is a joint venture engaged in the execution of works contracts for the Delhi Metro Rail Corporation and makes purchases for this purpose. It claimed refund of excess tax credit amounting to Rs. 17

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