LexCOMMISSIONER OF TRADE AND TAXES versus FEMC PRATIBHA JOINT VENTURE
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* Author [2024] 6 S.C.R. 337 : 2024 INSC 364 Commissioner of Trade and Taxes v. FEMC Pratibha Joint Venture (Civil Appeal No. 3940 of 2024) 01 May 2024 [Pamidighantam Sri Narasimha* and Prasanna Bhalachandra Varale, JJ.] Issues for Consideration (1) Whether the timeline for refund prescribed under s. 38(3) of the Delhi Value Added Tax Act, 2004 must be mandatorily followed while recovering dues under the Act; and (2) Whether the Tax Assessing Officer could pass an adjustment order to adjust Respondent’s claim for refund against default notices issued subsequently. Headnotes† Tax-VAT – Delhi Value Added Tax Act, 2004. – ss. 38(3) and 42 – Respondent claimed refund of excess tax credit along with interest for 4th quarter of 2015-2016 and 1st quarter of 2017-2018 – Appellant did not refund – Issued adjustment order against dues under four default notices issued in 2020, 2021 and 2022 – Adjustment order quashed by High Court – Appellant directed to refund with interest – High Court’s judgment affirmed. Held: Respondent claimed refund of excess tax credit along with applicable interest under Delhi Value Added Tax Act, 2004, s. 42, for the 4th quarter of 2015-2016 and 1st quarter of 2017-2018 through return filed on 29.03.2019 – Appellant did not refund until 2022 – Adjustment order issued to adjust Respondent’s claims against four default notices issued in 2020, 2021 and 2022 – Adjustment order challenged in High Court and is quashed – High Court’s judgment affirmed. Language of s. 38(3) of 2004 Act is mandatory – Timeline stipulated must be adhered to – Object of provision to ensure refunds are processed and issued in a timely manner – Adjustment under s. 38(2) permitted only against amounts ‘due under the Act’ – 338 [2024] 6 S.C.R. Digital Supreme Court Reports Appellant not justified in retaining refund amount and adjusting it towards notices issued subsequent to the refund period – Effect of timeline under s. 38(3) not only for calculation of interest under s. 42 – Contention rejected. [Paras 6-10] Case Law Cited Flipkart India Private Limited v. Value Added Tax Officer, Ward 300, 2023 SCC OnLine Del 5201; Swarn Darsan Impex v. Commissioner, Value Added Tax, 2010 SCC OnLine Del 4697; Nucleus Marketing and Communication v. Commissioner of Delhi Value Added Tax, 2016 SCC OnLine Del 3941; Rockwell Industries v. Commissioner of Trade and Taxes, 2019 SCC OnLine Del 8432; ITD-ITD CEM JV v. Commissioner of Trade and Taxes, 2019 SCC OnLine Del 9568; Ramky Infrastructure Ltd. v. Commissioner of Trade and Taxes, 2023 SCC OnLine Del 4236; Commissioner of Trade and Taxes v. Corsan Corviam Construction S.A. Sadbhav Engineering Ltd. JV, 2023 SCC OnLine Del 1900 - referred to. List of Acts Delhi Value Added Tax Act, 2004. List of Keywords Refund; Adjustment; Adjustment order; Timeline; Default notices. Case Arising From CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3940 of 2024 From the Judgment and Order dated 21.09.2023 of the High Court of Delhi at New Delhi in WP (C) No. 2491 of 2023 Appearances for Parties N Venkataraman, A.S.G., Mukesh Kumar Maroria, V C Bharathi, Udai Khanna, Siddharth Sinha, Advs. for the Appellant. Rajesh Jain, Virag Tiwari, Rishabh Jain, Ramashish, K. J. Bhat, Avadh Bihari Kaushik, Advs. for the Respondent. [2024] 6 S.C.R. 339 Commissioner of Trade and Taxes v. FEMC Pratibha Joint Venture Judgment / Order of the Supreme Court Judgment Pamidighantam Sri Narasimha, J. 1. The issue for consideration before us is whether the timeline for refund under Section 38(3) of the Delhi Value Added Tax Act, 20041 must be mandatorily followed while recovering dues under the Act by adjusting them against the refund amount. 2. The brief facts relevant for our purpose are as follows. 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. 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 t
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