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CA Final · Indirect Tax Laws · Refunds

Anand Pharma Ltd's refund was sanctioned, but the credit to the bank account given in the application failed because of wrong account details. Anand took 12 days to furnish the correct bank details, and the refund was then credited. How does rule 94 treat this 12-day period while computing the period of delay for interest?

The 12 days are excluded from the period of delay. Rule 94(2)(b) leaves out any time the applicant takes to furnish correct bank account details or validate them when the sanctioned refund could not be credited. The fifteen-day threshold applies only to replies to RFD-08 notices.

  1. AIt is included in the period of delay because delay is always the department's liability
  2. BIt is excluded from the period of delay under rule 94(2)(b)Correct
  3. COnly the days beyond fifteen days are excluded
  4. DIt is excluded only if the applicant pays a penalty

Explanation

Rule 94(2)(b) excludes any period of time taken by the applicant for furnishing correct bank details or validating them where the sanctioned refund could not be credited. No fifteen-day threshold applies to this clause; that threshold belongs to clause (a) for RFD-08 notices. So all 12 days are excluded.

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