FILING OF RETURNS, ASSESSMENT AND COLLECTION OF TAX, REFUND

FILING OF RETURNS, ASSESSMENT AND COLLECTION OF TAX, REFUND

7.4         Approval of refund

The amount refundable to any person shall be subject to the approval from the following authorities who may, by order in writing passed after providing opportunity of being heard to the affected person, change the amount of refund or order that no refund is due. The following authorities shall be competent to allow refund, arising from a single order, of the amount mentioned against each:

1.	Commissioner	Any amount
2.	Officer incharge of the range	Rs. 10,00,000/-
3.	Officer incharge of the district	Rs. 5,00,000/-
4.	Excise and Taxation Officer or Assistant Excise and Taxation Officer	Rs. 50,000/-

The lower authority/authorities shall submit the record of the case along with his/their recommendation(s) to the competent authority at the appropriate level at least 30 days before the time prescribed for issuing refund without interest lapses and the competent authority shall intimate its decision to the lower authority/authorities well in time. It may, by order in writing, increase or decrease the amount of refund or may order that no refund is due but no adverse order shall be passed without giving the affected person a reasonable opportunity of being heard.

7.5         Refund adjustment against any dues

Before any refund is given to any person under this Act it shall be first adjusted with any amount due from him under this Act or the Central Act for any period and the balance, if any, only shall be refunded to him.

(a) If the dealer desires payment by adjustment against any amount subsequently payable by him, he shall be issued a refund adjustment order in Form VAT-G9 authorising him to deduct the sum to be refunded from the amount payable by him in respect of the subsequent return period or periods following that in which the refund adjustment order is issued or for any amount determined to be payable by him subsequently.
(b) In support of any claim for deduction the dealer, shall attach the refund adjustment order to the subsequent return(s) to be furnished by him under the Act or to the treasury receipt showing the credit into the appropriate Government treasury of the amount in respect of which a demand notice has been issued to him.
(c) After allowing such deductions, the assessing authority shall cause the refund adjustment order to be cancelled.
(d) The refund adjustment order shall be transferable and the transferee shall have the same rights as the transferor had in respect of the refund adjustment order before its transfer. The credit of payment against a refund adjustment order shall be allowed after due verification.

7.6         Final Payment of refund with interest

(i) Any amount ultimately found due to any person, which he paid as a result of an order passed under this Act, shall be refunded to him with simple interest at the rate of one per cent per month for the period from the date of payment to the date when refund is given to him.

(ii) Any amount, not falling within the above part, refunded after a period of 60 days from the date of making an application under section 20 (5) shall carry with it simple interest at the rate of one per cent per month for the period from the date of making the application to the date when the refund is made.

(iii)Any amount due to a dealer under section 12 (4) but not refunded to him within 60 days from the date of order of approval of the refund by the prescribed authority shall carry with it simple interest at the rate of one per cent per month for the period from the date of order of approval of the refund by the prescribed authority to the date when the refund is made.

7.7         Order sanctioning interest on delayed refunds

• Where a refund payment order or a refund adjustment order is issued in respect of an amount ultimately found due to a person which he paid as a result of an order passed under the Act, the authority issuing the refund shall simultaneously record an order sanctioning the interest payable on such refund, specifying therein, the amount of refund, the period for which such interest is payable and t he amount of interest payable by the State Government, and shall communicate the same to the person to whom the interest is payable and also to the Commissioner.
• Where a refund payment order or a refund adjustment order is issued, the authority issuing such order shall simultaneously record an order sanctioning the interest payable, if any, on such refund, specifying therein, the amount of refund, the payment of which was delayed, the period of delay for which such interest is payable and the amount of interest payable by the State Government, and shall communicate the same to the dealer to whom the interest is payable and also to the Commissioner stating briefly the reasons for the delay in allowing the refund.
• In respect of the above points, where an order for the payment of interest on refunds or delayed refunds as the case may be, has been made, the sanctioning authority shall issue to the dealer interest payment order in Form VAT-G10.

7.8         Power to withhold refund

• Where an order giving rise to a refund is the subject matter of further proceedings and the taxing authority interested in the success of such proceedings is of the opinion that the grant of the refund is likely to adversely affect the recovery in the event of success of such proceedings, he may, for reasons to be recorded in writing, withhold the refund and shall, if such authority is below the rank of Commissioner, refer the case, within 30 days of the application for the refund, to the Commissioner for order.
• If a reference has been made to the Commissioner under section 21(1) in time, he may either pass an order withholding refund or direct that refund be made on furnishing of security except cash security of the like amount or decline to withhold the refund: However, if no order withholding the refund is received within 90 days of making the reference to the Commissioner, the refund shall be given forthwith.
• Indian needs GST a paperless refund mechanism similar to the system prevailing in the Income Tax. A lot is expected from GST.

7.9         Miscellaneous

• Where the dealer is unable to identify the goods purchased with the goods sold, or used in manufacturing and sold, it shall be presumed that the goods purchased have been sold, or they have been used in manufacturing and sold, as the case may be, in the chronological order in which they were acquired.
  (ii) The assessing authority shall enter in a register in Form VAT-G11 particulars of all the refunds allowed in pursuance of assessment orders, all applications for refunds and of the order passed thereon.

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