Delhi High Court Puts Assessing Officer on Notice for Four-Year Refund Delay — Campus Activewear Limited Vs CIT

Background of the Case

In a stern reminder to the Revenue authorities regarding their statutory obligations, the Delhi High Court took up the matter of Campus Activewear Limited Vs CIT and passed a conditional order placing the Assessing Officer at risk of being summoned personally before the Court if the due refund — along with applicable interest — was not released within the stipulated timeframe.

The case highlights a growing concern within the Indian tax administration landscape: the inordinate and unjustifiable delay in processing and disbursing legitimately owed refunds to assessees, even when orders directing such refunds already exist. In this particular matter, the refund had allegedly been withheld for a period of four years, a fact that the Court found troubling enough to record explicitly in its order.

What Transpired Before the Court

During the hearing, Mr. Vipul Agrawal, the learned Senior Standing Counsel appearing on behalf of the respondents, submitted before the Delhi High Court that the necessary steps for processing the petitioner's refund were currently being undertaken by the concerned department. He further assured the Court that the required action would be completed within four weeks from the date of the hearing.

Taking note of this submission, the Court proceeded to list the matter for the next date of hearing on 14.09.2026.

The Court's Conditional Direction

The Delhi High Court did not merely accept the Revenue's submission at face value. Instead, it coupled the adjournment with a clear and firm conditional direction, which is worth noting in detail:

"In case, due payment is not made to the petitioner alongwith applicable interest by the next date, the Assessing Officer (AO) shall remain present in the Court, in order to explain the reasons for the inordinate delay caused in making the due compliance of the order and not making refund to the petitioner for last four years."

This direction carries significant weight for several reasons:

  • The Court has made the personal presence of the Assessing Officer mandatory — but only if the refund with applicable interest remains unpaid by 14.09.2026.
  • The AO will be required to personally explain before the Court why there has been such a prolonged delay — spanning four years — in complying with what appears to be an existing order.
  • The order effectively creates a compliance deadline backed by judicial accountability, rather than leaving the matter open-ended.