2025:JHHC:11585-DB IN THE HIGH COURT OF JHARKHAND AT RANCHI W.P.(T) No. 4109 of 2024 ---- M/s Kota Dall Mill, a partnership firm duly registered under the Partnership Act, 1932, having its factory at plot number IV/H 13 to 21, Industrial Area, Biada, Bokaro-827014, through its Authorized Signatory Mr. Akash Kumar Aged about 32 years, Son of Shri Prakash Sahu, Resident of Qrt. No. DT-2792, Tanki Side Dhurwa, Ranchi, P.O. Dhurwa, P.S. Dhurwa, District Ranchi- 834004, Jharkhand. .....Petitioner Versus 1. The State of Jharkhand, through the Secretary-cum-Commissioner of Commercial Taxes, Jharkhand having his office at Project Bhawan, Dhurwa, P.O. Dhurwa, P.S. Jagannathpur, District- Ranchi (Jharkhand). 2. Commissioner of State Taxes, Government of Jharkhand, having its Office at Excise Building, Kanke Road, P.O. Gonda, P.S. University, District Ranchi-834006. 3. Joint Commissioner of State Taxes, Administration, Dhanbad Division, Dhanbad, having its office at Beside City Civil Court, Dhanbad, P.O.- GPO, P.S. Dhanbad Sadar, District-Dhanbad, Jharkhand. 4. Deputy Commissioner of State Taxes, Bokaro Circle, Bokaro, having his office at Commercial Taxes Building, Bokaro, P.O. & P.S. Bokaro Steel City, District-Bokaro, Jharkhand. 5. Sales Tax Officer, Bokaro Circle, Bokaro, having his office at Commercial Taxes Building, Bokaro, P.O. & P.S. Bokaro Steel City, District-Bokaro, Jharkhand. ….Respondents CORAM: HON’BLE THE CHIEF JUSTICE HON’BLE MR. JUSTICE DEEPAK ROSHAN ---- For the Petitioner : Mr. Biren Poddar, Sr. Advocate Mr. Piyush Poddar, Advocate Mr. Manav Poddar, Advocate For the Respondents : Mr. Sachin Kumar, AAG-II ---- Reserved on 20/03/2025 Pronounced on 17 /04/2025 Per Deepak Roshan, J. The instant writ application has been preferred by the petitioner praying for a direction upon the respondent authorities 2025:JHHC:11585-DB to pay the differential amount of interest of Rs. 51,70,576/- on account of interest accrued on the principal amount of Rs. 3,54,21,551/- which was admittedly refunded to the petitioner by the Respondent Department on 21.03.2023 i.e., after delay of 916 days from the date of refund application filed by the Petitioner. 2. The Petitioner-Company is engaged in manufacture and supplier of Supplementary Nutrition Food, having its manufacturing unit at Bokaro, for which it was duly registered as dealer under the Jharkhand Value Added Tax Act, 2008 (in short „JVAT Act‟). The petitioner filed its monthly Returns for the period 2017-18 as also the quarterly Returns and Annual Return under the JVAT Act, 2005 for the period from April, 2017 to June, 2017 and deposited applicable tax vide different Challans, issued on different dates. An assessment proceeding was initiated by the 4th Respondent on 25.03.2018, in which the Petitioner participated and submitted all the requisite documents and returns. However, an assessment order dated 25.04.2019 (Annexure 2 of the writ petition) was passed by the Assessing Authority, by enhancing 30% of the sales, merely on the basis of assumptions and presumptions. The aforesaid assessment order was challenged by the Petitioner before the Court of Commissioner, Commercial Taxes, Jharkhand, Ranchi being Revision Case No. CC(S) 518/2019, who, after hearing the petitioner, vide revision order dated 26.09.2019 had remanded the matter back to the Assessing Authority for passing the fresh order. 3. Pursuant to the remand, Assessing Authority initiated fresh assessment proceeding and after due verification of the records of the Petitioner, passed a fresh assessment order dated 04.06.2020 and issued an excess Demand Notice No. 218 dated 06.06.2020 (Annexure-3 of writ petition) determining total refund 2025:JHHC:11585-DB of Rs. 3,55,21,551/-. Subsequently, the aforesaid fresh assessment order dated 04.06.2020 was reviewed by the Commercial Taxes Officer, Bokaro Circle, Bokaro (5th Respondent) on account of error apparent on record and passed a reviewed assessment order dated 27.07.2020 and issued a revised excess Demand Notice No. 959 dated 27.07.2020 (Annexure 4 of writ petition) determining total refund of Rs. 3,54,21,551/-. 4. After issuance of the aforesaid revised excess demand notice No. 959 dated 27.07.2020 (Annexure-4 of writ petition) for Rs. 3,54,21,551/-, the Petitioner filed an online refund application vide acknowledgment dated 16.09.2020(Annexure-5 of writ petition), for refund of the aforesaid excess amount. Despite issuance of the revised excess Demand notice No. 959 dated 27.07.2020 (Annexure-4 of writ petition), and despite filing of “Refund application” on 16.09.2020, when the aforesaid principal amount of Rs. 3,54,21,551/ was not refunded to the Petitioner along with statutory interest, the Petitioner filed a writ petition being W.P.(T) No. 3236 of 2022 before this Court. 5. During the course of hearing of the aforesaid writ petition on 06.02.2023, the Respondent Department, on the basis of the statement made at para-7 (0) of the Counter Affidavit dated 19.12.2022, filed in the above writ petition submitted that request for allotment of Rs. 3,54,21,551.00 has been made to the Secretary, Commercial Taxes Department, Jharkhand, Ranchi on 06.12.2022 for the purposes of refund. Finally, during the pendency of the aforesaid writ petition being W.P.(T) No. 3236 of 2022, the principal amount of Rs. 3,54,21,551.00 was refunded to the Petitioner on 21.03.2023 in the Bank Account; but surprisingly, no interest was paid to the Petitioner on the aforesaid refunded principal amount. However, during the course of hearing on 22.03.2023 of the aforesaid writ petition, the Respondent Department submitted before this Court that if the petitioner approaches the 2025:JHHC:11585-DB Respondent Department with an application for claim of the interest on the refunded amount, the same shall be considered in accordance with law. On the basis of the aforesaid submissions made by the Respondent Department, this Court vide Order dated 22.03.2023 (Annexure-6 of writ petition), had disposed of the aforesaid writ petition, relegating the Petitioner to approach the 4th Respondent with an application for claim of interest on the principal amount of refund, which shall be decided in accordance with law and liberty has been granted to the petitioner to approach this court if aggrieved with order on the claim for interest on refund amount. 6. After disposal of the aforesaid writ petition, the petitioner vide application dated 10.04.2023 (Annexure-7 of the writ petition) had made application for claim of interest on the refund amount, calculating therein the total interest amount to the tune of Rs. 72,14,351/- to be paid to the Petitioner for delay of total 826 days in refund of the principal amount of Rs. 3,54,21,551/. When no action was taken by the 4th Respondent on the aforesaid application dated 10.04.2023, the Petitioner constrained to file a contempt application being Cont. Case (Civil) No. 611 of 2023 before this Court, for non-compliance of the order dated 22.03.2023 passed by this Court in W.P.(T) No. 3236 of 2022. During the pendency of the aforesaid contempt application, the Assistant Commissioner of State Tax, Bokaro Circle, Bokaro vide Notice No. 5387 dated 02.03.2024 (Annexure-8 of the writ petition) had directed the Petitioner to submit Form JVAT 206 through on-line for claiming the interest of Rs. 72,14,351.00. Petitioner on 02.03.2024 itself submitted Form JVAT 206 online and submitted the hard copy of the same with the 4th Respondent vide Letter dated 04.03.2024 (Annexure-9 of the writ petition) along with copy of intimation letter, cancelled cheque and online receipt of the refund application. 2025:JHHC:11585-DB Contempt application being Cont. Case (Civil) No. 611 of 2023 was heard on 13.03.2024 and after hearing, this Court vide Order dated 13.03.2024 (Annexure-10 of writ petition) has dismissed the same. 7. However, on receipt of the aforesaid Form JVAT 206, the Respondent Department, without any reasons, whatsoever, released only an amount of Rs. 20,43,775/-/credited in the Bank Account of the petitioner on 27.03.2024 (Annexure-11 of the writ petition), out of total claim of interest amounting to Rs. 72,14,351.00 and therefore an amount of Rs. 51,70,576/- is still outstanding. When no action was taken by the Respondent Department for releasing of the differential amount of interest, the Petitioner again vide application dated 11.06.2024, sent through e-mail 11.06.2024 (Annexure-12 of the writ petition), once again requested the 4th Respondent to pay the differential amount of interest of Rs. 51,70,576/-, but till date no action in this regard has been taken by the 4th Respondent. 8. Having heard learned counsels for the rival parties it appears that the moot question for consideration by this Court is that from which date the Petitioner shall be entitled to interest on the aforesaid refunded amount of Rs. 3,54,21,551/- and whether the Petitioner has rightly claimed the amount of interest to the tune of Rs. 72,14,351.00 from the Respondent Department? To resolve the above question, it is relevant to refer Section 52 and 55 of the Jharkhand Value Added Tax Act, 2005, which provides for granting interest of refund amount. “52. Refund.-(1) Subject to other provisions of this Act and the Rules made thereunder, the prescribed authority shall, refund to a dealer the amount of tax, penalty and interest, if any paid by such dealer in excess of the amount due from him. “55. Interest (1) A registered dealer entitled to refund in pursuance of any order under this Act (including assessment under Section 35, Section 36 or Section 37) or in pursuance of any order by any Court, shall be entitled to receive, in addition to refund, simple interest at the rate of six percent per annum for the period commencing after ninety days of the application claiming refund in pursuance to such order till the date on which the refund is granted.” 2025:JHHC:11585-DB Further, Rule 19(2)(a) of the Jharkhand Value Added Tax Rules, 2006, prescribe as under: “19(2)(4) The claim for refund under Section 52 of the Act, shall be made by a VAT dealer in Form JVAT 206, within ninety days from the date of receipt of excess demand notice." From perusal of the aforesaid Sections 52 and 55 of the JVAT Act, 2008, read with aforesaid Rule 19(2)(8) of the Rules, it will appear as under: (1) Order of refund shall be under Section 35, Section 36 or Section 37 of the Act or in pursuance of any order by any court. (ii) Claim for refund shall be made in Form JVAT 206, within ninety days from the date of receipt of excess demand notice. (iii) Interest shall be @ 6% p.a, which shall be accrued after ninety days of the application claiming refund till the refund is granted. 9. After going through the documents annexed with the respective affidavits it is crystal clear that all the conditions for getting refund have been fulfilled in the case of the Petitioner, which shall be evident from the following admitted facts: (i) Revised Excess Demand Notice dated 27.07.2020 (Annexure 4 of writ petition) issued to the petitioner showing the excess tax amount of Rs. 3,54,21,551.00, arising of Assessment Order passed u/s 35 of the JVAT Act, 2005, for the period 2017-18. (ii) Refund application submitted online 16.09.2020 (Annexure-5 of writ petition) by the petitioner claiming refund of Rs. 3,54,21,551.00. (iii) As per the provisions of the JVAT Act, 2005, the amount of interest starts accruing automatically after 90 days from the date of submission of application of refund, which was submitted by the petitioner on 2025:JHHC:11585-DB 16.09.2020 and 90 days therefrom expired on 15.12.2020, hence interest will start accruing w.e.f. 16.12.2020. 10. Accordingly, we hold that the Petitioner was entitled to interest for 826 days delay on the refund of the amount of Rs.3,54,21,551.00. 11. Though Interest amount @ 6% per annum comes to Rs. 48,09,567/- for the delay of 826 days; however, the Petitioner has claimed for the interest @ 9% p.a. which comes to Rs. 72,14,351/, which has been claimed by the Petitioner in light to Judgment dated 21.10.2021 passed by Gujrat High Court in Special Civil Application No. 8881 of 2021 filed by the petitioner and subsequently confirmed by Hon'ble Apex Court vide order dated 25.02.2002 passed in SLP (C) No. 1623 of 2022. For brevity, relevant part of the Judgment dated 21.10.2021 passed by Gujrat High Court is extracted herein below: “7. Ms. Shah submitted that for the period between 09.09.2020 and 09.09.2021, an amount of Rs.26,53,336/- (Rupees Twenty Six Lac Fifty Three Thousand Three Hundred Thirty Six Only) has been paid to the writ- applicants towards interest at the rate of 9%. 8. In such circumstances referred to above, Ms. Shah prays that as the principal amount of Rs.2,94,81,847/- has been paid alongwith the amount of Rs.26,53,336/- [Rupees Twenty Six Lac Fifty Three Thousand Three Hundred Thirty Six Only] towards interest for the period between 09.09.2020 and 09.09.2021, nothing remains to be done in the present litigation. 9. On the other-hand, Mr. Mehta would submit that the interest has accumulated over a period of five years i.e. for the years 2016-2017; 2017-2018; 2018-2019; 2019-2020 and 2020-2021. The amount paid towards interest is only for the year 2020-2021. The total amount even as per the calculation of the State as submitted before this Court by way of a Chart comes to Rs. 1,23,39,376-16ps [Rupees One Crore Twenty Three Lac Thirty Nine Thousand Three Hundred Seventy Six And Sixteen Paisa] towards interest from the year 2016 till 09.09.2021. In such circumstances, Mr. Mehta would submit that as on date an amount of Rs. 96,86,040/- [Rupees Ninety Six Lac Eighty Six Thousand Forty Only] is due and payable towards interest. 2025:JHHC:11585-DB 10. The calculation in the form of a Chart placed on record by the learned Government Pleader tallies with the Chart produced by the writ-applicants at Page-245 of the paper- book. This Court in its order dated 17.08.2021 recorded that an amount of Rs.4,47,16,002/-is payable towards interest i.e. towards outstanding differential VAT amount of 0.5% for the 62 invoices issued by the writ-applicant no.1 Firm arising from the agreement dated 03.02.2010. However, the litigation can be put an end by asking the State to pay the balance amount of Rs.96.86.040/- [Rupees Ninety Six Lac Eighty Six Thousand Forty Only) towards interest. CONCEPT OF INTEREST: 11. When interest is awarded by the Court, our normal feeling is that it is so awarded by way of penalty or punishment. But interest in all cases is not granted by way of penalty or punishment. In this regard, reference may be made to the decision of the Supreme Court in the case of Alok Shanker Pandey Vs. Union of India, 2007 AIR (SC) 1198, wherein the concept of grant of interest has been explained in the following manner:- "It may be mentioned that there is misconception about interest. Interest is not a penalty or punishment at all, but it is the normal accretion on capital. For example if A had to pay B a certain amount, say ten years ago, but he offers that amount to him today, then he has pocketed the interest on the principal amount. Had A paid that amount to B ten years ago, B would have invested that amount somewhere and earned interest thereon, but instead of that A has kept that amount with himself and earned interest on it for this period. Hence equity demands that A should not only pay back the principal but also interest thereon to B." Emphasis Supplied 12. Thus, we see that though the facts of the said case are bit different especially when we see para 7 of the aforesaid judgment, it is clear that in the said case the Respondents have paid interest @ 9% to the writ applicant. However, in the instant case the interest is calculated as per Rule-19(2)(a) of the Jharkhand Value Added Tax Rules, 2006. However, taking a clue from the order of Alok Shankar Pandey referred to in the above referred judgment that; had the Revenue paid the interest to the Petitioner at the right time, the Petitioner could have invested that amount. Thus, we are of the 2025:JHHC:11585-DB view that the Petitioner is certainly entitled for enhanced rate of interest. Accordingly, we hold that the Petitioner is entitled for the interest @ 9% p.a. which comes to Rs. 72,14,351/, for the period from 16.12.2020 to 20.03.2023 i.e. for 826 days delay on the refund of the amount of Rs.3,54,21,551.00. 13. The contention of the Revenue that the refund application claiming refund of interest was filed by the petitioner on-line on 04.03.2024 and thus the interest is calculated accordingly from the date of filing of such application of refund. The aforesaid contention of the Revenue is not correct on facts and is also untenable on two folds. Firstly, “Refund application” was first submitted online 16.09.2020 (Annexure-5 of writ petition) by the Petitioner claiming refund of Rs. 3,54,21,551.00. Secondly, in the letter dated 05.07.2024 (Annexure-A to the counter affidavit), it is mentioned that in view of the orders passed by Hon‟ble Apex Court in Suo Moto Writ Petition (C) No. 3 of 2020) the period from 15.03.2020 to 28.02.2022 is excluded while calculating interest amount; is misconceived and not tenable in the eye of law. 14. At this stage, it is relevant to indicate that the order dated 10.01.2022 passed by Hon‟ble Apex Court in Suo Moto Application the limitation exemption was with regard to instituting quasi or quasi-judicial proceedings and the same was extended; whereas in the instant case of the Petitioner neither any proceedings were to be instituted nor it relates to judicial or quasi-judicial proceedings. Even otherwise, the Central Board of Indirect Taxes, New Delhi has clarified in the Circular no. 157/13/2021-GST dated 20.07.2021 that „The Tax authorities can continue to hear and dispose off proceedings where they are performing the functions as quasi-judicial authority. This may inter alia include disposal of application for refund, application for revocation of cancellation of registration, adjudication proceeding 2025:JHHC:11585-DB of demand notices etc’. Emphasis Supplied 15. Having regard to the aforesaid facts and circumstances, we hold that the ground of the respondents with regard to payment of less interest in the background of Suo Moto Writ Petition (C) No. 3 of 2020) that the period from 15.03.2020 to 28.02.2022 excluded while calculating the interest amount, is untenable and without any legs to stand in the eye of law. We have already held in the preceding paragraph that the Petitioner is entitled for the interest @ 9% p.a. which comes to Rs. 72,14,351/, for the period from 16.12.2020 to 20.03.2023 i.e. for 826 days delay on the refund of the amount of Rs.3,54,21,551.00. 16. Consequently, the Respondent Department is directed to pay the differential amount of interest @ 9% p.a. to the petitioner on account of interest accrued on the principal amount of Rs. 3,54,21,551/- after deducting Rs. 20,43,775/- which was refunded belatedly to the petitioner on 21.03.2023 i.e., after delay of 826 days from the date of refund application filed by the Petitioner. It is made clear that the Respondent department shall make payment of such interest @ 9% after proper calculation within a period of 10 weeks from the date of receipt/production of a copy of this order. 17. As a result, the instant writ application stands allowed for the left over due only in the manner indicated hereinabove. Pending I.As, if any, also stands disposed of. (M. S. Ramachandra Rao, C.J.) (Deepak Roshan, J.) Jk A.F.R.