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uma shankar (Company Secretary)     19 June 2013

Ap vat

A sum of money has been assessed as  refundable  to us under AP VAT relating to the year 2011-12. We have an earlier demand on us for th eassessment  year 2002-2003 from the CTO, for which however, we have obtained a Stay order from the Hon'ble AP High Court.  However, the DC is demanding a Bank Guarantee for release of the refund due to us. We find no justification for the demand for a bank guarantee in respect of an amount lawfully refundable to us. Can the learned members advice ? Case laws supporting our case would be welcome. Thanks in advance.



 2 Replies


since a demand is pending against you which is sub judice, the Deptt. may insist you for furnishing bank guarantee against refund.

C. SANJEEVA RAO (ADVOCATE)     05 December 2013

The demand is related to 2002-03 i.e. prior period of VAT regime. The assessment was completed for 2011-12 i.e. under VAT regime, hence, the CTO cannot demand for the bank guarantee against such dues. However, for speedy process of refund, you have to pay the amount, if such amount is actually due to the department or otherwise, as you have told the demand for 2002-03 is covered by stay from HC. The CTO cannot detain the refund.

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