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2017 (9) TMI 1539 - GUJARAT HIGH COURTRecovery of amount refunded and interest paid on the refund amount - section 40(1) of the VAT Act - the petitioner had purchased goods from dealers who themselves were eligible under the said scheme - breach of condition no.19 of the notification dated 11.10.2013 - the case of the petitioner was that the condition no.19 would not disentitle the petitioner from seeking refund on such purchases - Section 37 of the VAT Act. Held that: - Under subsection (1) of section 37 thus, it is open for a registered dealer to apply for a provisional refund pending assessment. Under subsection (2), it is open for the Commissioner by imposing necessary condition to grant such provisional refund. Such provisional refund can be disturbed only in terms of subsection (4) of section 37 if on assessment, the provisional refund granted is found to be in excess. In order to disturb the provisional refund already granted what is therefore necessary is to assess the return of the petitioner - A provisional refund once granted under subsection (4) of section 37 can be disturbed and recovery can be demanded only on final assessment and not otherwise. In can be appreciated that during the assessment, many issues may come up and ultimate tax liability of an assessee can be judged only on final assessment. There cannot be a stand alone assessment of a refund claim in isolation, keeping the rest of the return unassessed. In the present case, no such assessment is framed. In that view of the matter, impugned orders dated 20.07.2017 and 25.07.2017 in both the petitions are set aside - petition allowed - decided in favor of petitioner.
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