Interest is allowed on a postponed reimbursement of money paid under the VSV Act: Rajasthan HC
Dwejesh Acharya S/o Late Kalyan Sharma Vs ITO (Rajasthan High Court)
Facts:
- Petitioner filed for a refund under the Vivad Se Vishwas Act, 2020 (VSV Act) for the Assessment Year 2013-14.
- Received Form No. 3 indicating a refund of Rs. 3,47,03,505/- on 25/1/2021, followed by Form No. 5 on 8/3/2021 confirming settlement.
- Despite entitlement, refunds were delayed and adjusted against demands on different dates.
Observations:
- The petitioner was due the refund since the issuance of Form No. 5 on 8/3/2021.
- No valid reason was provided for the delay in refunding the amount after entitlement.
- Precedents from Delhi and Bombay High Courts indicated the right to interest on delayed refunds.
Conclusion:
- The court acknowledged that the VSV Act’s provision (Section 7) doesn’t restrict interest post the determination of refund.
- Ruled in favor of the petitioner, granting interest at 6% p.a. for the delayed period beyond 90 days from the determination of the refund amount on 8/3/2021.
- Directed the revenue authority to pay the interest on the delayed refund within 8 weeks from the court’s order.
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