2018 (3) TMI 1675 - HC - Indian Laws

Refund of ₹ 52.0 crores, which was withheld and was not being paid for technical reasons - Held that - The respondent / revenue would take remedial steps and would ensure that such complaints are not made. Assessee should not be compelled to file writ petition to get refund - petition disposed off.

Summary

Issues:
Refund withheld for technical reasons, delay in processing refund, interest rate on delayed refund, software upgrade for processing refunds, adjustment of refund amount, petitioner's grievance over withheld money.

Analysis:
The case involved a writ petition filed by the petitioner seeking a refund of ?52.0 crores that was withheld for technical reasons. The revenue's stance was that due to a merger/amalgamation, the migration of PAN number was necessary before processing the refund. The court noted that such mergers and amalgamations are common, and the revenue should have upgraded their software to handle such situations or processed the refund manually. The revenue acknowledged the delay and stated that interest at the rate of 6% per annum had been paid, although some refund needed to be adjusted.

The petitioner did not object to the adjustment but expressed dissatisfaction with the interest rate being lower than the market rate, resulting in the petitioner suffering financially. The court expressed hope that the revenue would take corrective measures to prevent such situations in the future, emphasizing that taxpayers should not have to resort to filing writ petitions to receive refunds. The writ petition was disposed of with a warning that costs might be imposed in the future.

Overall, the judgment highlighted the importance of timely refund processing, the need for software upgrades to handle various scenarios, and the impact of interest rates on delayed refunds. It also underscored the responsibility of the revenue to ensure a smooth refund process for taxpayers and avoid unnecessary grievances and legal interventions.