Hon’ble SC upheld strict adherence to the time limit of Refunds

By Mr. Vikash Agarwal

📝Hon’ble SC upheld strict adherence to the Time Limit for Refunds

Recently Hon’ble Supreme Court enunciated the following principles with respect to adherence to the time limit for granting refund and adjusting any tax dues therefrom;

📌The department must strictly adhere to the time limit for processing and issuing refunds under the statute

📌Refunds should be processed promptly within the prescribed time frame

📌Refund amounts can only be adjusted when an enforceable demand (such as pending tax or duty) exists at the time of refund

📌Department has no legal right or justification to retain the refund amount beyond the prescribed time limit, delay if any in refund disbursement is not permissible

📌Department cannot withhold the interest payment; same is payable from the date when the refund was originally due to be paid to the person

This ruling re-validated the fact that both the refund and tax assessments are separate proceedings🔍🔍

Ref. Judgment- Civil Appeal No. 3940 of 2024, Commissioner of Trade and Taxes vs FEMC Prathiba Joint Venture.