1997 (9) TMI 595 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Eligibility for Sales Tax Exemption
2. Refund of Excess Tax Paid
3. Entitlement to Interest on Refund Amount

Issue-wise Detailed Analysis:

1. Eligibility for Sales Tax Exemption:
The petitioner, proprietrix of Little Flower Oil Mills, claimed exemption from payment of sales tax and surcharge for the assessment years 1981-82 to 1985-86, based on the Supreme Court decision in Pournami Oil Mills case [1987] 65 STC 1. The Tribunal reversed the initial adverse decisions and remitted the matter to the assessing authority, who subsequently confirmed the petitioner's eligibility for exemption, stating that the petitioner was qualified for full tax exemption for five years from the date of production, which commenced on April 13, 1981.

2. Refund of Excess Tax Paid:
The revised assessment orders for 1981-82 to 1983-84 (exhibits P2 to P4) and for 1984-85 and 1985-86 (exhibits P6 and P7) ordered refunds of the excess tax paid. Despite these orders, no refunds were made to the petitioner. The petitioner claimed a total refund of Rs. 4,29,207 based on these orders. The department's appeals against these orders were ultimately dismissed by the Tribunal, confirming the petitioner's entitlement to the refunds.

3. Entitlement to Interest on Refund Amount:
The petitioner sought a writ of mandamus for the refund with interest at 24% per annum from the date of the orders. The court noted that under section 44 of the Kerala General Sales Tax Act, 1963, the petitioner is entitled to interest at 6% per annum if the refund is not made within 90 days of the order. The court acknowledged that the revised assessment orders were subject to further proceedings, which ultimately restored the orders. The court granted interest at 10% per annum from August 30, 1995, for the years 1981-82 to 1983-84, and from July 29, 1996, for the years 1984-85 and 1985-86, considering the delay by the respondents and the amended section 44 of the Act.

Conclusion:
The court directed the first respondent-assessing authority to refund the amount due to the petitioner as per the revised assessment orders, deducting any adjustments made for other dues. The court also ordered the payment of interest at 6% from July 17, 1990, to August 29, 1995, and at 10% thereafter for the years 1981-82 to 1983-84, and at 6% from July 25, 1990, to July 28, 1996, and at 10% thereafter for the years 1984-85 and 1985-86, as per the amended section 44 of the Act. The petition was disposed of accordingly.