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2019 (4) TMI 1633 - GUJARAT HIGH COURTRefund claim - non-disbursement of refund validly due to the petitioners - retrospective cancellation of certificate of entitlement - HELD THAT:- The mighty Government insists on the petitioners paying all the dues for the different periods prior to availing of the benefit of refund from them. On account of the fact that the respondents have issued the eligibility certificate for the period 14.7.2013 to 13.7.2021 on 23.12.2014, the petitioners who till they were granted such certificate had discharged their tax dues as normal dealers were now saddled with the liability of discharging the output tax liability which they had paid by taking credit of input tax paid on purchases. The petitioners, on account of being called upon to pay unanticipated tax dues are in financial straits and not in a position to pay such amount unless the amount payable to them under the scheme by the Government is also paid over to them. On the one hand the petitioners are called upon to pay the entire tax liability and on the other and they are denied reimbursement of the output tax on the ground that they had paid the same by adjusting the input tax credit. Thus it is a no win situation for the petitioners. In the opinion of this court, under the Gujarat Textile Policy which is in the nature of an incentive scheme, there is also an obligation cast upon the Government to grant refund/reimbursement of the amount due and payable to the dealers. However, for the purpose of considering as to whether there is due compliance with the provisions of the scheme, it is only the obligation cast upon the dealer which has been taken into consideration, ignoring the fact that such failure has occasioned on account of the non-fulfillment of the reciprocal obligation cast upon the Government authorities to refund/reimburse the amounts due to the dealers. The controversy in the present case is therefore, required to be amicably resolved by ensuring that while the Government does not have to compromise insofar as recovery of taxes is concerned, a balance is maintained, whereby the petitioners are also in a position to continue with the business to fulfil the object of the textile policy - the amount due and payable by the petitioners works out to approximately ₹ 2,75,26,130/- and in terms of the garnishee order issued by the Commercial Tax Department to the Industries Department, the petitioners are entitled to a refund of approximately ₹ 5 crore. Thus, if the Commercial Tax Department and the Industries Department work out the outstanding amount payable by the petitioners and the refund/ reimbursement to which they are entitled and adjust the same, by and large the entire controversy could be resolved. Petition allowed in part.
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