Interest due to Department/Assessee

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

30 June 2011 The VAT/CST Assessments of earlier years ( 2001 -2005) are taken up now and demands are issued for certain lapses like Forms not submitted, rates of taxes are different etc. Can the Department demand interest also with this demand? When we can take up the issue of Limitation Act? If the Assessments were taken up in the respective years, the assessee would have paid the dues that year itself. It is not the fault of assessee? Can we fight on this ground?

Similarly, the Department is not taking up the assessments for VAT. Will the assessee be entitled to refund of interest also from the due date and if so what is the due date?

MJ Krishnamurthy

MJ Krishnamurthy (Expert)

01 July 2011 Mr Author,
There is a limitation period for initiating an assessment,say 5 years after completion of financial year or submission of final return,etc.,but subject to conditions such as (1) it is not applicable to the cases already commenced by issue of notices (2)not for caes where special investigation cases were pending (3)where any litigtion in Courts were pending or stay orders were issued etc.
Interest will become due on the demands raised for the previous years.
In the case of VAT every monthly return is deemed to be accpted as correct,unless reopened on the basis of some intelligence report etc.
If any amount due to the dealer is not refunded soon then the Govt has to pay interest also @0.5%/month.
MJK

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