Supreme & Paige

Whether the timeline for refund under Section 38(3) of the Delhi Value Added Tax Act, 2004 must be mandatorily followed while recovering dues under the Act.

The respondent is a joint venture engaged in the execution of works contracts for the Delhi Metro Rail Corporation and makes purchases for this purpose.It claimed refund of excess tax credit amounting to Rs. 17,10,15,285/- for the 4th quarter of 2015-16 through revised return filed on 31.03.2017 and Rs. 5,44,39,148/- for the 1st quarter of 2017-18 through return filed on 29.03.2019, along with applicable interest under Section 42 of the Act.

Contention/submissions of appellant:

The appellant did not pay the refund even until 2022, pursuant to which the respondent sent a letter dated 09.11.2022 for the consideration of their refund.The Value Added Tax Officer passed an adjustment order dated 18.11.2022 to adjust the respondent’s claims for refund against dues under default notices dated 30.03.2020, 23.03.2021, 30.03.2021, and 26.03.2022.

Contentions/submission of respondent:
The respondent filed a writ petition before the Delhi High Court for quashing the adjustment order and the default notices.


The High Court quashed the adjustment order and directed refund of Rs. 17,10,15,285/- for the 4th quarter of 2015-16 and Rs. 5,44,39,148/- for the 1st quarter of 2017-18, along with interest as per Section 42 till the date of realization.The refund amount can be adjusted only when an enforceable demand in the nature of tax or duty is pending against the assesses.


Principle /ratio:
The department must adhere to the timeline stipulated therein to fulfill the object of the provision, which is to ensure that refunds are processed and issued in a timely manner.



Appeal dismisses



Case no:CIVIL APPEAL NO. 3940 OF 2024


Name – Parul

University – Dav university Jalandhar

Semester– 6th

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