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2016 (10) TMI 941 - HC - VAT and Sales TaxWithholding of Refund claim, which is already crystallised - whether the refund amount can be adjusted against the recoverable amount from the petitioner? - section 39 of the Gujarat Value Added Tax Act, 2003 - Power to withhold refund in certain cases - Held that: - A perusal of section 39(1) would show that refund payable to a dealer can be withheld if the order giving rise to such refund is subject matter of appeal or further proceeding or an other proceeding under the Act is pending and the Commissioner is of the opinion that grant of refund is likely to adversely affect the Revenue. It is true, that in the present case, for other period, the assessing authority has passed orders against the petitioners raising tax demands. However, such orders are challenged by the petitioner in appeal in which upon depositing ₹ 10 lacs, rest of the tax demand is stayed. When these tax demands are thus stayed, allowing the Commissioner to withhold the refund for such tax demand would frustrate the stay order. In effect the department would be recovering the amount in respect of which stay has been granted by the appellate authority against the recovery. Such indirect recovery in the guise of withholding of refund cannot be permitted. Power under section 39(1) of the Act would not empower the authority to frustrate stay order granted by the competent authority or Court. There appears to be a clear non application of mind on part of the authority just to withheld the amount which is lawfully payable to the petitioner. One may notice that this amount which has been determined by the authority is by way of provisional refund amount and the same is determined to the extent of 90% of the original amount which was to be payable and therefore, while passing the order and sanctioning the amount of refund, sufficiently the interest of revenue has been protected and, therefore, we are of the opinion that since prima facie requirements to invoke the power to withhold the amount of refund are not available on record, such action is not possible to be confirmed and, therefore, the stand taken by the counsel for the Revenue is not possible to be accepted. The respondent authority directed to release the amount of refund which has already been sanctioned in favour of the petitioners within a period of eight weeks - petition disposed off - decided in favor of petitioner.
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