TMI Blog2010 (6) TMI 725X X X X Extracts X X X X X X X X Extracts X X X X ..... this refund. There is, therefore, absolutely no reason for the respondents to withhold the payment of refund to the petitioner. - W.P. (C) No. 3817 of 2010 - - - Dated:- 3-6-2010 - BADAR DURREZ AHMED AND JAIN V.K. , JJ. JUDGMENT:- The judgment of the court was delivered by BADAR DURREZ AHMED J. In this writ petition, inter alia, the following reliefs have been prayed for: (i) Issue a writ of mandamus or any other writ, order or direction in the nature thereof directing the respondents to refund the amount of Rs. 41,89,487 due to the petitioner along with interest thereon forthwith; (ii) Issue a writ of certiorari or any other writ, order or direction quashing the impugned notice dated April 9, 2010 under section 58A for special audit; (iii) Issue a writ of mandamus or any other writ, order or direction in the nature thereof directing the respondents to release the documents/records seized by way of illegal search. Mr. Bajpai, the learned senior counsel appearing on behalf of the petitioner, at the outset, stated that in this writ petition he would be limiting his submissions to prayer (i) above and that he seeks liberty to raise the issues concernin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (4) Where the Commissioner has issued a notice to the person under section 58 of this Act advising him that an audit, investigation or inquiry into his business affairs will be undertaken or sought additional information under section 59 of this Act, the amount shall be carried forward to the next period as a tax credit in that period. (5) The Commissioner may, as a condition of the payment of a refund, demand security from the person pursuant to the powers conferred in section 25 of this Act within fifteen days from the date on which the return was furnished or claim for the refund was made. (6) The Commissioner shall grant refund within fifteen days from the date the dealer furnishes the security to his satisfaction under sub-section (5). (7) For calculating the period prescribed in clause (a) of sub-section (3), the time taken to, (a) furnish the security under sub-section (5) to the satisfaction of the Commissioner; or (b) furnish the additional information sought under section 59; or (c) furnish returns under section 26 and section 27, shall be excluded. (8) Notwithstanding anything contained in this section, where, (a) a registered dealer has sol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed, Mr. Taneja submitted that a notice for producing documents under section 59 of the said Act had been issued on June 9, 2009 to the petitioner which has remained unanswered and, therefore, there was no question of granting that refund until and unless the petitioner furnished the requisitioned documents. Mr. Taneja also submitted that in view of the fact that the additional information was sought under section 59 of the said Act, by virtue of section 38(4) thereof, the amount of the refund of Rs. 15,54,232 is to be carried forward to the next tax period as a tax credit in that period. Lastly, with regard to the third refund amounting to Rs. 13,35,537, Mr. Taneja submitted that the refund claim is yet to be examined and until that is done, the payment cannot be made. Mr. Taneja also submitted generally in respect of all the three claims that the period of two months specified in section 38(3) and the period of fifteen days mentioned in section 38(5) of the said Act were merely directory and not mandatory. Mr. Taneja also referred to a decision of this court in the case of Commissioner of Sales Tax v. Behl Construction [2009] 21 VST 261; [2009] 162 ECR 110 in support of his submis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion to give effect to the acceptance (including the remission of any penalty assessed either in whole or in part); or (b) refuse the objection or the remainder of the objection, as the case may be; and in either case, serve on the person objecting, a notice in writing of the decision and the reasons for it, including a statement of the evidence on which it is based: Provided that where the Commissioner within three months of the making of the objection notifies the person in writing, he may continue to consider the objection for a further period of two months: Provided further that the person may, in writing, request the Commissioner to delay considering the objection for a period of up to three months for the proper preparation of its position, in which case the period of the adjournment shall not be counted towards the period by which the Commissioner shall reach his decision. One of the arguments raised in Behl Construction [2009] 21 VST 261 (Delhi); [2009] 162 ECR 110 (Delhi) was that the provisions of section 74(7) of the said Act were directory and not mandatory. This court agreed with that submission on a consideration of the provisions of section 74(7) in conju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be regarded. In Bhikraj Jaipuria [1962] 2 SCR 880, the Supreme Court also noted the following observations of Lord Campbell in Liverpool Borough Bank v. Turner [1860] 30 LJ Ch 379: No universal rule can be laid down as to whether mandatory enactments shall be considered directory only or obligatory with an implied nullification for disobedience. It is the duty of courts of justice to try to get at the real intention of the Legislature by carefully attending to the whole scope of the statute to be construed. Thus, whether a provision is mandatory or directory, has to be gathered from the real intention of the Legislature and after examining the scope and purpose of the statute and no hard and fast rule can be laid down for such a determination. Consequently, the fact that the word shall as appearing in section 74(7) was taken to be directory and not mandatory in Behl Construction [2009] 21 VST 261 (Delhi); [2009] 162 ECR 110 (Delhi), does not ipso facto mean that the word shall as appearing in section 38(1) and 38(3), also ought to be construed as being merely directory. The provisions of section 74 and those of section 38 operate in entirely different fields and d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intent behind the provisions of section 38? It is this intent which shall determine whether the stipulations as to time are merely directory or they are mandatory as suggested by the use of the word shall . On going through all the subsections of section 38 of the said Act, the legislative intent that is clearly discernible is that refunds must be granted to a person entitled within the specific time period stipulated in sub-section (3) thereof. This intention is further fortified by a look at the provisions of sub-section (7) of section 38 which stipulates that for calculating the period prescribed in clause (a) of sub-section (3), the time taken to furnish the security under sub-section (5) to the satisfaction of the Commissioner or to furnish the additional i nformation sought under section 59 or to furnish returns under sections 26 and 27, shall be excluded . This provision as to exclusion of time taken in doing the aforesaid acts, is in itself an indication that the Legislature was dead serious about the stipulation as to time for making refunds under section 38(3) of the said Act. For, if the legislative intent were not so, what was the need or necessity for providing for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 08. That was not done. In fact, there is no formal demand of security from the petitioner at all. The requirement of furnishing the security of Rs. 5 lacs was only on the basis of an oral request which was also complied with by the petitioner. Consequently, there is no question of the refund of Rs. 12,99,718 being withheld on the ground that the petitioner should furnish security for the balance amount. The said refund had become due for payment by operation of the provisions of section 38(3) of the said Act latest by January 2, 2009. That has not been done. We are clearly of the view that the petitioner is entitled to payment of the refund of the said amount of Rs. 12,99,718 forthwith along with interest thereon to be calculated in terms of section 42 of the said Act. We now come to the second claim of refund of Rs. 15,54,232. We find that Mr. Taneja has taken the plea that a notice under section 59 had been issued to the petitioner on June 9, 2009 which has gone unanswered and it is because of this that the refund payment has not been made. First of all, we may point out that the learned counsel for the petitioner stated that the purported notice dated June 9, 2009 issued unde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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