Interest on delayed VAT refunds is not automatic and requires a valid Form A-VIII application.

The petitioner, a West Bengal company engaged in tyre manufacturing, transported goods from Nadia, West Bengal, to Sitamarhi in a vehicle bearing registration no. WB-41D/5208.

The vehicle was intercepted at Bhagalpur on 1 June 2014, and a penalty of ₹1,69,017 was imposed under Sections 61(3) read with 56(4)(b) of the Bihar Value Added Tax Act, 2005 (“VAT Act”).

The penalty order dated 2 June 2014 and the appellate order dated 28 February 2015 were subsequently set aside by the Commercial Taxes Tribunal in Appeal Case No. BH-224/2015.

After paying the penalty pursuant to the original order, the petitioner filed an application in Form A-VIII for refund on 21 May 2024.

The Joint Commissioner directed the petitioner to rectify those defects on 18 June 2025, but the petitioner did not do so and instead approached the High Court seeking refund with interest.

Whether the petitioner’s Form A-VIII refund application was required to be filed before the Additional Commissioner of State Tax, and whether filing it before the Joint Commissioner of State Tax justified refusal of the refund.

Whether Form A-VIII applies to refund of penalty, and whether interest on the delayed refund accrued automatically after sixty days from communication of the Tribunal’s order.

Whether the petitioner was entitled to an immediate refund and interest despite failing to rectify the defects identified in its refund application.

Section 68 of the VAT Act requires refund of tax, penalty or interest paid in excess of the amount due in the prescribed manner.

Section 70 provides for interest on delayed refund after the prescribed period, but Section 70(2) excludes any period of delay attributable to the dealer.

Rule 43(1) of the Bihar Value Added Tax Rules, 2005 (“VAT Rules”) designates the Joint Commissioner as the prescribed refund authority where the amount exceeds ₹50,000, while Rule 43(2) requires an application in Form A-VIII.

Relying on M/s Milith Karv Engineering & Trading Pvt. Ltd. v. State of Bihar & Ors., C.W.J.C. No. 17690 of 2014, and the applicable notification dated 10 August 2018, the Court held that the Joint Commissioner of Commercial Taxes had been re-designated as the Additional Commissioner of State Tax, and that an application filed before the Joint Commissioner could not be rejected on that technical ground.

The refund amount exceeded ₹50,000, making the Joint Commissioner the prescribed authority under Rule 43(1).

Although the petitioner filed the application before the Joint Commissioner of State Tax, rather than the re-designated Additional Commissioner of State Tax, the Court held that the application could have been forwarded internally and rejected the objection as merely technical.

The Court also rejected the argument that Form A-VIII was confined to tax refunds, finding that the form expressly contemplated refund of excess tax or penalty.

However, the petitioner’s application was defective and the petitioner failed for approximately one year to comply with the direction dated 18 June 2025 to rectify it.

Since the delay was attributable to the petitioner, Section 70(2) precluded an immediate claim for interest for that period, and interest could not be treated as automatically payable from the date of communication of the Tribunal’s order.

Nevertheless, because the original application contained defects that the petitioner had failed to cure, the Court declined to grant immediate refund with retrospective interest.

The petitioner was directed to file a fresh Form A-VIII application before the Additional Commissioner of State Tax within ten days of receiving or producing the order.

The authority was directed to refund ₹1,69,017 within ten days of receiving the fresh application.

If payment was not made within that period, the authority would be liable to pay interest at 6% per annum from its own funds for the delayed period.

The writ petition was accordingly disposed of.