Delhi VAT | No Interest On Refund For Period Of Delay Attributable To Dealer: High Court

Section 38(3)(a)(ii) of DVAT Act stipulates a period of two months for refund of excess tax, penalty, etc., if the period for refund is a quarter.

A division bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta cited Explanation to Section 42(1) of the DVAT Act and observed,

“If the delay in granting the refund is attributable to the said person (dealer), whether wholly or in part, the period of the delay attributable to him shall be excluded from the period for which the interest is payable.”

In the case at hand, Petitioner, a sustainable urban mobility service provider which operates electric vehicle fleet globally, had sought a refund of Rs. 25,40,422/- along with interest in terms of the returns filed by it for the first quarter of 2017-18.

VAT Commissioner submitted that upon proper bank details being furnished by the Petitioner, refund was granted on 8th June, 2023. Interest amount was also paid for the period between 7th February, 2023 till 8th June, 2023.

The Petitioner was aggrieved by the non-grant of interest from September 2017, the date from which the entitlement arose.

At the outset, the Court noted that the Commissioner had refused interest for the said period in view of the bank details furnished by the Petitioner being incorrect.

Agreeing with the approach adopted by the Commissioner, the Court said,

“In view of the Explanation to Section 42(1), since the mistake in the bank details would be attributable to the dealer, in the opinion of the Court, the Petitioner would not be entitled to any further interest.”

As such, the petition was dismissed as withdrawn.

Appearance: Mr. Sumit K Batra, Mr. Manish Khurana, Ms. Priyanka Jindal & Mr. Siddhanth Sarwal, Advs for Petitioner; Mr. K.G. Gopalakrishnan, Ms. Nisha Mohandas, Mr. Kunwar Raj Singh, Advs. with Mr. Vinod Mann, GSTOWard 88 & Mr. Poshinder Singh, LA DTT, GNCTD

Case title: Lithium Urban Technologies Pvt. Ltd v. Commissioner Of Value Added Tax & Anr.

Citation: 2025 LiveLaw (Del) 427

Case no.: W.P.(C) 4925/2023

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