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2015 (5) TMI 915 - ALLAHABAD HIGH COURT

2015 (5) TMI 915 - ALLAHABAD HIGH COURT - TMI - Claim of interest on refund - Refund claim was adjusted towards penalty imposed - Penalty for charging tax at higher rate - Held that:- On an order being made by the First Appellate Authority on 04.10.1988 that a decision was taken by the Assessing Authority on 16.05.1989 to the effect that the money cannot be returned in view of Section 29 (3) of the Sales Tax Act. The issue of refusal to refund the money due under Section 29(3), in our opinion, w .....

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n adjusted by the department against the amount of penalty which was levied under Section 15-A(1)(QQ). It is also relevant to note that Explanation II to Section 29 provides that the refund would include any adjustment under sub-section 1 of Section 29 of the Act.

In the facts of case, the order for refund of the money adjusted against penalty was directed to be returned to the assessee under the order dated 04.10.1988 which order stands affirmed up to the High Court. Therefore, the l .....

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- Decided in favour of assessee. - Writ Tax No. - 286 of 2012 - Dated:- 14-5-2015 - Hon'ble Arun Tandon And Hon'ble Surya Prakash Kesarwani,JJ. For the Petitioner : Ashok Kumar,Praveen Kumar For the Respondent : C.S.C. ORDER Heard Shri Praveen Kumar, Advocate on behalf of the petitioner and the Shri C.B.Tripathi, Special Counsel on behalf of the department. Petitioner before this Court seeks a writ of mandamus directing the respondents to pay interest on the amount directed to be refund .....

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wever the High Court in the case of Commissioner, Sales Tax vs. M/s. Babani & Co. reported in 1984 UPTC, 81 held that on confectionery items the rate of tax applicable would be 4% only. The assessee made an application under Section 22 of the Sales Tax Act which was allowed and it was held that the assessee was liable to pay tax @ 4% but while passing the said order under Section 22 of the Trade Tax Act, the Assessing Authority decided to proceed against the assessee under Section 15-A (1)(Q .....

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e assessee filed an appeal before the Deputy Commissioner (Appeals) which was allowed vide order dated 04.10.1988 and it was held that the amount of penalty imposed be returned to the assessee in accordance with the rules applicable. Operative portion of the order reads as follows : Appeal Sankhya 442/87, 443/87 sweekar ki jati hai aur aaropit arthdand samapt kiya jata hai. Appealkarta dwara yadi yah rashi jama kar di gayi ho to use niyamanusar wapas kiya jaye.? We may record that in the said or .....

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igh Court being Trade Tax Revision No. 816 of 1999. The revision was also dismissed under an order dated 20.12.2005. After passing of the order by the Appellate Authority dated 04.10.1985, the assessee made an application for refund of amount in terms of the appellate order. This application of the assessee was rejected by the Assessing Authority vide order dated 16.05.1989 and it was held that in view of Section 29(3) of the Trade Tax Act, the money need not be returned to the petitioner-assess .....

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lowed vide order dated 07.09.2012. The order under Section 29(3) of the Trade Tax Act as well as the order of the Appellate Authority dated 27.02.1991 were quashed and a direction was issued that the respondents must return the entire money in accordance with the rules applicable. The money so excess deposited by the petitioner has been returned and he has also been paid interest for the period commencing from 12.12.2002 i.e. from the date on which the order of the Tribunal dated 07.09.2002 was .....

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t be paid from 04.10.1988 as per the rates which were prevalent during the relevant period till the date the order of the Tribunal was received by the department i.e. 12.12.2002. Counsel for the department however disputes the correctness of claim so made. It is the case of the department that it is only under the order of the Tribunal dated 07.09.2002 received by the Tribunal on 06.12.2002 that a positive direction for refund of excess deposit by the petitioner has been made, therefore, no mone .....

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s Tax Act which reads as follows : ?29. Refunds : (1) The assessing authority shall, in the matter prescribed, refund to a dealer any amount of tax, fees or other dues paid in excess of the amount due from him under this Act : Provided that the amount found to be refundable shall first be adjusted towards the tax or any other amount outstanding against the dealer under this Act or under the Central Sales Tax Act, 1956 and only the balance, if any, shall be refunded. (2) If the amount found to be .....

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r of refund passed by the Assessing Authority to the date of refund. Explanation 1 : The date of refund shall be deemed to be the date on which intimation regarding preparation of the refund voucher is sent to the dealer in the manner prescribed. Explanation II : The expression 'refund' includes any adjustment under the proviso to sub-section (1). (3) Notwithstanding any judgment, decree or order of any court or authority no refund shall be allowed of any tax or fee due under this Act on .....

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n 29(3) as well as Section 29(4) of the Sales Tax Act have been interpreted by the Court to mean that the refund can be refused in cases where the liability has been passed on by the assessee upon any other party. Meaning thereby that on the principle of ?undue enrichment?, there can be a denial of refund of tax or other dues by the department even if there is a direction by the competent authority/Court. There is no dispute in the said principle of law laid down by the Division Benches of this .....

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ee from its customers had in fact been returned to the consumers by issuance of the credit note. The finding of the Appellate Authority in that regard stands affirmed both under the order of the Tribunal dated 06.04.1999 and under the order of the High Court dated 08.12.2005 whereby the second appeal and the revision filed by the department against the order of the First Appellate Authority had been dismissed. We may record that on an order being made by the First Appellate Authority on 04.10.19 .....

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proviso of the Sales Tax Act, a power has been conferred upon the taxing authority to adjust any amount which is refundable against any other outstanding of the assessee. It is with reference to this power that the amount of excess tax which was paid by the assessee had been adjusted by the department against the amount of penalty which was levied under Section 15-A(1)(QQ). It is also relevant to note that Explanation II to Section 29 provides that the refund would include any adjustment under s .....

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