1990 (7) TMI 343 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether the petitioner is entitled to a refund of the tax paid during provisional assessment.
2. Interpretation of Section 44 of the Kerala General Sales Tax Act, 1963 regarding refunds.
3. Application of rules 43(2) and 44 in the context of refund provisions.
4. Entitlement to claim interest on refundable amount in case of delay by assessing authority.
5. Consideration of a Supreme Court decision on collection of tax without authority of law.

Analysis:
1. The petitioner sought a refund of Rs. 5,00,000 paid towards sales tax dues for the provisional assessment year 1988-89, along with interest. The appellate authority set aside the provisional assessment but the assessing authority did not complete the assessment or refund the tax paid during the appeal. The petitioner moved for a writ of mandamus to compel the refund, alleging unauthorized retention of tax by the first respondent.

2. The court analyzed Section 44 of the Act, which mandates refund of excess tax paid by a dealer upon final assessment or upon order from an appellate or revisional authority. The provision allows for adjustment of refund against any amount due from the dealer. Rules 43(2) and 44 outline the procedure for refund or adjustment within ninety days of receiving the order, with provision for interest at 6% per annum if the refund is delayed.

3. The scope of these provisions clarifies that the assessing authority must refund excess tax paid by the dealer or adjust it as per the order from the appellate or revisional authority. Failure to comply within ninety days entitles the dealer to claim interest on the refundable amount. The rules emphasize timely refund or adjustment to avoid unauthorized retention of tax by the authority.

4. The court rejected the argument that retention of the amount beyond ninety days of the appellate order was without authority of law, citing a Supreme Court decision. The Supreme Court's stance on tax collection without authority of law was distinguished from the present case where tax was paid based on provisional assessment, and refund was sought under Section 44. The court held that the petitioner's claim for unauthorized retention of tax was unfounded and dismissed the petition.

5. The judgment concluded by dismissing the original petition, emphasizing that the retention of tax during provisional assessment did not amount to unauthorized collection without authority of law. The court upheld the legal provisions governing refunds and rejected the petitioner's argument for a refund based on unauthorized retention of tax.