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2016 (8) TMI 426 - HC - VAT and Sales TaxRefund – input tax credit - adjustment of refund with outstanding demand - there was no outstanding demand that had been determined for the aforementioned period for which the refund was claimed - In terms of Section 38 (4) of the DVAT Act, it was open to the Commissioner, if he sought to make inquiries while processing the refund, to go in for an audit of the business affairs of the Petitioner under Section 58 of the DVAT Act or seek additional information under Section 59 of the DVAT Act. In the present case, none of these steps were taken by the Respondent/Department of Trade & Taxes (“DT&T”). Held that:- This Court has in a series of judgments emphasised the mandatory nature of the time limits under Section 38 of the DVAT Act for processing of the refunds. - Due to the careless action of the VATO in the present matter, who issued the issued the 'adjustment order' dated 30th December 2010 unmindful of the law, an interest burden of nearly ₹ 56 lakhs is now placed on the exchequer. A question then arises as to who should be made responsible for this and whether any action on the disciplinary side is not called for? Consequently, the Commissioner, VAT is directed to seek an explanation from the VATO who issued the above 'adjustment order' and to pass appropriate orders on the disciplinary side as he deems fit not later than four weeks from today. A copy of this order be delivered forthwith to the Commissioner, VAT by the Registry through a Special Messenger for compliance with the above direction. – decided in favor of petitioner.
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