TMI Blog1981 (8) TMI 205X X X X Extracts X X X X X X X X Extracts X X X X ..... uce relevant papers and by unnecessarily drawing adverse inferences. As a result of such assessments, a sum of Rs. 5,72,52,212 was raised against it under the two statutes as per particulars given below: --------------------------------------------------------------------------- Year Demands under Addl. C.S.T. Act O.S.T. Act O.S.T. --------------------------------------------------------------------------- 1973-74 Rs. 1,45,92,135.00 Rs. 2,42,826.00 -- 1974-75 1,86,77,226.00 5,71,376.00 -- 1975-76 2,27,39,020.00 4,09,225.00 Rs. 20,404.00 --------------------------------------------------------------------------- Total Rs. 5,60,08,381.00 Rs. 12,23,427.00 Rs. 20,404.00 --------------------------------------------------------------------------- The assessee appealed to the Assistant Commissioner against the assessments by contending that the assessments were arbitrary, mala fide and based upon surmises and conjectures and had been completed with a predetermined mind. An application for stay of realisation of the demands for the three years was made in the appeals and the appellate authority ultimately directed that there would be stay of realisation of the balance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment, no amount by way of tax was due from the petitioners under the three statutes. The Sales Tax Officer was therefore not entitled to withhold the amount paid by the assessee. The view taken by the Sales Tax Officer, namely, that the application was premature, it is contended, is without basis, inasmuch as with the setting aside of the assessments and wiping out of the demands, the money deposited has become refundable. It is further submitted that the view of the Sales Tax Officer that the refund is due only after reassessment is completed is contrary to the scheme of the statute, and therefore, this Court should direct the Sales Tax Officer to refund the money of the petitioners. Dr. Pal, appearing for the petitioners, further submits that this is not a case where any direction under section 14-D of the Orissa Sales Tax Act has been made. The Sales Tax Officer, therefore, has no authority to reject the application for refund. 3.. The opposite parties have filed a common counter wherein it has been pleaded: "........... But in the instant case, the learned Tribunal has merely indicated the line along which the assessment should be made/should have been made and reman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g full payment of the admitted tax or composition money or by a crossed cheque or crossed bank draft covering the admitted tax or composition money, as the case may be, and by a dealerwise list of sales to the registered dealers in duplicate in respect of which deduction is claimed under item (ii) of sub-clause (a) of clause (A) of sub-section (2) of section 5 in respect of the period to which the return relates, shall not be deemed to be a return for the purpose of this section and, in case such cheque or bank draft is dishonoured for payment, the return shall not be deemed to be a return for the purpose of this section." A return to be valid, therefore, postulates payment of entire admitted tax and enclosure of proof thereof in the prescribed manner. Admittedly, the petitioners had made such returns for all the three years. It, therefore, follows that the petitioners had paid all the tax which according to its books of account was payable. Section 12 of the Orissa Act provides the procedure for making assessments. After assessment is made under section 12, section 13, sub-section (1), provides: "Tax payable under this Act shall be paid in the manner hereinafter provided at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. It is also possible, as has been contended by Dr. Pal for the petitioners, that the reassessment may not result in any demand. When the matter stands in such a position, can it be said that the amount, refund of which is claimed, is due from the petitioners under the Act ? If the money is not due from it, certainly the right to claim refund under the parent provision of section 14 arises. The proviso to section 14 is not very material. The entire scope of the proviso is to fix the outer time-limit within which an application for refund has to be made. The proviso does not create the right for refund nor has it anything to say about it. The main provision in section 14 clearly indicates when exactly a claim for refund is available to be made. Section 14-D which was inserted into the Act by Orissa Act 2 of 1966 with effect from 30th of April, 1966, provides: "Power to withhold refund in certain cases.-Where an order giving rise to a refund is the subject-matter of an appeal or further Proceeding under this Act, the Commissioner may, if he is of the opinion that the grant of refund is likely to adversely affect the revenue, withhold the refund till such time as he deems prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Court in the case of Orient Paper Mills Ltd. v. State of Orissa [1961] 12 STC 357 (SC). We, however, agree with Dr. Pal's submission that the two questions which Narasimham, C.J., posed are the only questions which have to be considered while dealing with an application under section 14 of the Act. The next case relied upon by Dr. Pal is a Bench decision of the Allahabad High Court in the case of Purshottam Dayal Varshney v. Commissioner of Incometax, U. P. [1974] 94 ITR 187. The court was dealing with Chapter XIX of the Income-tax Act of 1961, which made provision for refunds. The question that arose for consideration before the Allahabad High Court was, when an assessment is set aside and remanded by the appellate authority for reassessment, when does the period of six months stipulated in the statute after which interest becomes payable under section 244, commences to run? Gulati, J., speaking for the court observed: "Under the Income-tax Act, although the liability to pay tax is cast upon an assessee each year in accordance with the Finance Act of that year, yet the tax becomes due and payable only when an assessment order is passed and a notice of demand under section 29 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This provision very clearly shows that as soon as an assessment order is set aside, the tax paid by the assessee under the assessment order becomes refundable to him. But the Income-tax Officer can withhold the refund during the pendency of the remand proceedings and in such a situation the assessee will not be prejudiced. " The provisions in the Income-tax Act under sections 240 and 241 correspond to sections 14 and 14-D of the Orissa Sales Tax Act. We agree with the ratio of the Allahabad decision. Under the Central Sales Tax Act, the machinery provided for collection and refund is as in the State statute. Therefore, even in respect of the demand under the Central Sales Tax Act corresponding provisions of the State Act became applicable. In view of what we have said above, it follows that with the setting aside of the assessments by the Member, Additional Sales Tax Tribunal, the amounts paid by the assessee-petitioner against demands which have been set aside become refundable and the petitioner's applications, therefore, were not premature. The petitioner does not have to wait till reassessments are completed in order to claim refund. The learned standing counsel relie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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