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2023 (12) TMI 353 - HC - Income TaxPayment of interest on the amount of refund as due against the respondents - settlement of disputes under Vivad Se Vishwas Act - As argued provisions of Section 244A have no application, on the other hand Explanation to Section 7 of the VSV Act, 2020 specifically prohibits grant of any interest and application of provisions of Section 244A of the Income Tax Act and, therefore, the petition deserves dismissal - HELD THAT:- A perusal of Form No. 5 (Annex.9) clearly reveals that the order has been passed by the designated authority under the VSV Act, 2020 and Rules determining the amount of Rs.3,47,03,505/- refundable to the petitioner in accordance with the provisions of the Act. Once the order in Form No. 5 has been issued on 8/3/2021, the petitioner became entitled for the amount of refund. Admittedly, the said amount was refunded to the petitioner/adjustment towards the demands on 22/10/2021, 10/1/2022, 20/1/2022 and 30/5/2022. No reason worth the name has been indicated in response for the delay in refunding the amount to which the petitioner became entitled on passing of order in Form No.5 way back on 8/3/2021. The Delhi High Court in the case of Ms. Anjul [2022 (8) TMI 1438 - DELHI HIGH COURT] while relying on one judgment of Hon’ble Supreme Court in Union of India v. Tata Chemicals Limited [2014 (3) TMI 610 - SUPREME COURT] held that the State having received the money without right and having retained and used it, is bound to make the party good, just as an individual would do under like circumstances. The obligation to refund money received and retained without right implies and carries with it the right to interest. Bombay High Court in the case of UPS Freight Services [2023 (9) TMI 34 - BOMBAY HIGH COURT] while following the order in the case of Ms. Anjul (supra) also ordered for payment of interest as per the rate prescribed under Section 244A of the Income Tax Act in similar circumstances. So far as the plea raised by learned counsel for the respondents with reference to provisions of Explanation to Section 7 of VSV Act, 2020 is concerned, the same has been noticed for rejection only. A bare perusal of the Explanation would reveal that the Explanation pertains to payment of any amount under the Income Tax Act for the period before filing the declaration under subsection (1) of Section 4 of the VSV Act, 2020 and nothing to do with the entitlement to interest for the period after issuance of Form No.5 indicating entitlement of the petitioner to the amount of refund. Thus for the delayed payment, the petitioner is entitled to interest on the refund amount for the delay beyond the period of 90 days from the date of refund i.e. 8/3/2021. WP allowed - It is directed that the respondents-revenue shall make payment of interest @ 6% p.a. on the delayed refund amount w.e.f. 8/6/2021 i.e. beyond the period of 90 days from the date of determination of refund amount on 8/3/2021 till the date of actual/last payment. As the payment/adjustment has been made on various dates, interest would be calculated on the balance amount till each respective date.
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