Rule 128

            (1) Where a dealer is eligible for refund of tax under sub-section (5) of section 10 on the basis of the return submitted for any month during a year in respect of any goods exported outside the territory of India after adjustment under sub-rule (1) of rule 127 or a dealer is eligible for refund on the basis of any final return submitted under sub-section (4) of section 27, the officer authorized by the Commissioner in this behalf shall proceed to issue to such dealer a refund payment order in Form VAT 255 sanctioning refund of such amount within thirty five days after the end of the month for which such return is furnished within the time specified under section 35 or within fifteen days from the date of receipt of such return if it is filed after the time specified for that month and any other subsequent month for that year in which the dealer is eligible for refund of tax on the basis of the return filed or within thirty five days from the date of receipt of such final return.

          (2) In the case of any other dealer eligible for refund of tax under sub-section (5) of section 10 on the basis of the return submitted for the last month of any year, after adjustment under rule 127, the officer authorized by the Commissioner in this behalf shall proceed to issue to such dealer a refund payment order in Form VAT 255 sanctioning refund of any amount refundable, within thirty five days after the end of the last month of the year for which such return is furnished, within the time specified under section 35 or within fifteen days from the date of receipt of such return if it is filed after the time specified, declaring such amount as refundable after any adjustment.

(3) The Local VAT officer or VAT sub-officer may reject, within the time specified in sub-rule (1) or (2), any claim for refund if the claim filed appears to involve any mistake apparent on the record or appears to be incorrect or incomplete, based on any information available on the record, after giving the dealer the opportunity to show cause in writing against such rejection.

(4) In computing the period of thirty five days in sub-rule (1) or (2), there shall be excluded of the following periods under sub-section (3) of section 50, namely.-

            (a) any delay attributable to the conduct of the person to whom the refund is payable;

(b) the time during which any reasonable inquiry relating to the return or claim was initiated and completed; and

            (c) the time taken for adjustment under sub-section (2) of section 50 by the refunding authority of any tax, interest or other amount due.

(5) Where any amount refundable under sub-rule (1) is not refunded to the dealer within the period specified, the refund payment order in Form VAT 255 shall include the interest specified under section 50 covering the period following the end of the said period to the day of refund.

(6) The Local VAT officer or VAT sub-officer shall, if he is satisfied that any other refund is due to any person under the Act, by virtue of any order or proceeding, issue to such dealer a refund payment order in Form VAT 255 sanctioning refund of such amount together with payment of interest as provided under section 50.

(7) Where a refund payment order is issued, the officer shall simultaneously send a copy of such order to the Treasury Officer concerned or, where the cash transactions of the Government are handled by the Reserve Bank or any of its agency Banks, to the officer in charge of such Bank where the payment of the refund is to be made.