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2013 (3) TMI 108 - HC - VAT and Sales Tax


Issues:
1. Eligibility for sales tax exemption and refund of tax paid.
2. Authority of law for tax collection and refund process.
3. Binding nature of the order issued by the General Manager, District Industries Centre.

Analysis:
1. The petitioner, a small scale industrial unit proprietor, was granted sales tax exemption by an order dated 20/9/2007 for a period of seven years from 12/10/91 or until the sanctioned amount of Rs.1,60,909 was exhausted. Prior to this order, the petitioner had paid taxes under the KGST Act for the years 1991-92 and 1992-93. Subsequently, in a dispute for the years 1996-97 and 1997-98, the petitioner paid Rs.50,000 as a condition for a stay order. When the petitioner sought a refund of taxes paid during the exempted period, the claim was mostly rejected by the respondent. This led to the filing of a writ petition by the petitioner challenging the rejection.

2. The High Court emphasized that the order issued by the General Manager, District Industries Centre granting the petitioner sales tax exemption was binding on the respondent as well. The court held that any collection of tax from the petitioner during the period of exemption was unauthorized and should be refunded. Referring to the principles established by the Apex Court in Corporation Bank v. Saraswati Abharansala, the court concluded that the petitioner was entitled to succeed in their claim for a refund. The court deemed the respondent's previous order rejecting the refund claim as illegal and set it aside.

3. In the final disposition, the court directed the respondent to pass fresh orders on the petitioner's refund claim in accordance with the limits specified in the original exemption order. The court also instructed that the fresh orders must be issued within four weeks of receiving a copy of the judgment, effectively ensuring the petitioner's right to claim the refund as per the law and the binding order of exemption issued by the General Manager, District Industries Centre.

 

 

 

 

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