TMI Blog2016 (5) TMI 221X X X X Extracts X X X X X X X X Extracts X X X X ..... pre-deposit, once the Tribunal has allowed the appeals and decided the same in favour of the respondent, the consequence would be automatic and the respondent would be entitled to refund of the amount paid by way of predeposit. Refund of excess amount of tax paid - Section 36 of the GVAT Act - Petitioner submitted that the expression used is “paid” which is distinct from the expression “deposit”. Therefore, section 36 of the GVAT Act would not be applicable to the facts of the present case - Held that:- Section 36 of the GVAT Act provides for refund of excess payment and lays down that subject to the other provisions of the Act and the rules, the Commissioner may refund to a person the amount of tax, penalty and interest, if any, paid by such person in excess of the amount due from him. Provided that, the Commissioner shall first apply such excess towards the recovery of any amount due under the Act or the earlier laws and shall then refund only the balance amount, if any; provided further that no adjustment under the provision shall be made towards a recovery of an amount due that has been stayed by an appellate authority. On a perusal of the provisions of section 36 of the GV ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consequential of the orders of the Tribunal and the same has no connection with the appeals preferred by the petitioner before this court. As rightly submitted by the learned counsel for the respondent, even if the orders of the Tribunal were to be stayed, the assessment orders would not spring into operation entitling the petitioner to recover the amount under the same. The impugned order passed by the Tribunal, therefore, cannot, in any manner, be said to come in conflict with any order that may be passed by the High Court in the appeals. Having regard to distinct nature of the proceedings before the High Court and before the Tribunal, it cannot be said that the order passed by the Tribunal lacks propriety. - Decided against the revenue. - SPECIAL CIVIL APPLICATION NO. 18128, 18945, 18946, 18951, 18953, 18959 of 2015 - - - Dated:- 5-2-2016 - MS. HARSHA DEVANI AND MR. G.B.SHAH, JJ. FOR THE PETITONER : MS MANISHA LAVKUMAR SHAH, GOVERNMENT PLEADER FOR THE RESPONDENT : MR MIHIR JOSHI, SR. ADVOCATE with MR KEYUR GANDHI, ADVOCATE for M/s/ NANAVATI ASSOCIATES, ADVOCATE ORAL JUDGMENT (PER : HONOURABLE MS.JUSTICE HARSHA DEVANI) 1. All these petitions under Art ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sal of the appeals/revisions filed by the petitioner Company in respect of Unit I. As regards Unit II, the court was inclined to direct the petitioner company to make pre-deposit of 50% of only the tax amount without making pre-deposit of any interest or penalty. The court, accordingly, issued certain directions which shall be referred to at an appropriate stage. 4. By a common order dated 29.01.2015 made in Second Appeals No.420 and 421 of 2013 and Cross Objections No.2 to 2C of 2013, the Tribunal allowed the appeals of Unit II of the respondent and dismissed the cross objections filed by the Department. The Tribunal held that the resultant effect is that the appellant (respondent herein) is not liable to pay any tax, interest or penalty on the disputed transactions and there is no question of enhancement of penalty as prayed for by the Department in the cross objections. 5. Since, pursuant to the orders passed by the Tribunal, the amount paid by the respondent by way of pre-deposit was not refunded to it, the respondent moved the above referred Miscellaneous Applications No.74 to 77 of 2015 before the Tribunal in the above referred second appeals, stating that by the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partment to grant refund to the respondent within a period of fifteen days from that date, failing which the Assistant Commissioner who prepared the statement was directed to remain personally present before it on 14.10.2015. The revision applications and the miscellaneous applications were kept for further hearing on 14.10.2015. On 14.10.2015, the petitioner moved rectification applications before the Tribunal being Rectification Application No.55 to 58 of 2015, which came to be disposed of on the same day, by directing the petitioner to grant refund to the respondent Company as per the earlier order passed by the Tribunal on or before 30.10.2015. Being aggrieved, the petitioner has filed the present petitions challenging the above referred orders passed by the Tribunal. 7. Vide order dated 19.10.2015 made in Special Civil Application No.18128 of 2015, notice came to be issued and interim relief came to be directed in terms of Paragraph 7(C) of the petition. 8. Ms. Manisha Lavkumar Shah, learned Government Pleader appearing on behalf of the petitioner, vehemently assailed the impugned orders by submitting that the Tribunal by issuing directions for refund of the amount depos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact that it was brought to its notice that appeals against the order passed by the Tribunal in case of ONGC Ltd. were pending before the High Court and the High Court had admitted the appeals on substantial questions of law. This court while allowing the appeals, observed that once it was brought to the notice of the Tribunal that the appeals against its decision in the case of ONGC Limited are pending before this court and this court was seized with the matter, even to avoid any further multiplicity of proceedings, the Tribunal could not have insisted for disposing of the appeals by the first appellate authority following its earlier decision in the case of ONGC Limited, which are the subject matter of appeals before this court and that too, within a stipulated period of time. 8.2 Reference was made to the provisions of section 78 of the Gujarat Value Added Tax Act, 2003 (hereinafter referred to as the GVAT Act ), to point out that against the order of the Tribunal, appeal lies to the High Court. It was submitted that it is a settled legal position that an appeal is a continuation of the proceedings before the Tribunal and therefore, any relief which was claimed subsequent t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner Company deposits 50% of only the tax amount levied in respect of the Unit II within the time stipulated in the order (i.e. 50% of ₹ 423 crores as indicated in Annexure-II to the order). It was submitted that what was deposited pursuant to the order of this court was by way of pre-deposit for entertaining the appeals preferred by the respondent. Such deposit was to enure till the proceedings are decided by the Tribunal. It was pointed out that the pre-deposit was made in the case relating to Unit II in connection with the second appeals which have been decided in favour of the respondent and the entire demand has been set aside. Therefore, as on date, there is no demand pursuant to which the petitioner can retain the amount deposited by the respondent by way of predeposit. It was submitted that there is no provision in the GVAT Act for refund of the amount deposited by way of predeposit, therefore, the moment the appeal came to be decided in favour of the respondent, the petitioner was duty bound to return the pre-deposit amount without the respondent being required to make any application in that regard. It was submitted that since the amount was not returned, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Division Bench of this court in the case of Girishchandra R. Bhatt v. Dineshbhai V. Sanghvi, Principal and others, 1996 (1) GLH 523, for the proposition that if the court has powers to adjudicate, it also has powers to enforce the same. Right to adjudicate would be incomplete in absence of power to execute. The attention of the court was invited to the provisions of the Gujarat Primary Education Tribunal (Procedure) Order, 1987 referred to in the said judgment as well as the corresponding provisions of the Gujarat Value Added Tax Tribunal Regulations, 2008, to point out that similar provisions are contained in the Order of 1987 as well as in the Regulations of 2008 and therefore, the said decision would be squarely applicable to the present case. 9.3 As regards the contention raised on behalf of the petitioner that in respect of the amount deposited by the respondent, it is required to move necessary application for refund under the provisions of section 36 of the GVAT Act, the attention of the court was invited to the provisions of section 36 of the said Act to point out that the same provide for refund of excess amount of tax paid by a person. It was submitted that the expr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eposited by the respondent being in the nature of pre-deposit, has no connection with the appeals before this court. It was urged that the pre-deposit enures till the appeal before the Tribunal is decided and has no connection with the appeal before the High Court and that once the assessment order is quashed, there is no question of retaining such amount inasmuch as the same is not a refund of tax. It was urged that as pre-deposit does not fall within the ambit of appeal, there is no overlap and consequently there is no impropriety at all on the part of the Tribunal. It was, accordingly, urged that the petitions being devoid of merit, deserve to be dismissed. 10. This court has considered the submissions advanced by the learned counsel for the respective parties and has perused the record and proceedings as produced before the court and the judgement and order dated 28.03.2006 made in Special Civil Application No.14422 of 2008 as well as the paper-book as was filed before the Tribunal, which has been submitted by the learned counsel for the respondent. 11. The record of the case reveals that what was subject matter of challenge before this court in Special Civil Application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect of unit No.2 within the time limits stipulated in this order (i.e. 50% of ₹ 423 crores as indicated in Annexure II to this order). Such amount i.e. 50% of the tax amount for the period from 1995-96 to 2004-05 shall be first reduced by ₹ 75 crores already deposited and the balance amount shall be deposited in twelve equal monthly installments. The first such installments shall commence from 31st May 2006 and last such installment shall be deposited by 30th April, 2007. C. These interim directions shall operate during pendency of the appeals/revisions before the appellate authority/tribunal subject to the condition that on behalf of the petitioner Company an undertaking shall be filed by 31st May 2006 that - (i) The petitioner Company shall co-operate for expeditious disposal of the appeals/revisions, (ii) In case the petitioner Company finally loses in the proceedings right upto the Hon'ble Supreme Court, the petitioner Company will pay the amounts as may be determined. D. (i) The deposits to be made pursuant to this order shall be without prejudice to the rights and contentions of the parties and shall enure till the final disposal of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) without payment of tax with penalty (if any) or, as the case may be, of the penalty, or (b) on proof of payment of such smaller sum as it may consider reasonable, or (c) on the appellant furnishing in the prescribed manner, security for such amount as the appellate authority may direct. 14. On a plain reading of the provisions of sub-section (4) of section 73 of the GVAT Act, it appears that while the amount deposited under section 35F of the Central Excise Act, 1944 and section 129E of the Customs Act is by way of deposit pending the appeal, the amount paid under sub-section (4) of section 73 of the GVAT Act appears to be in the nature of payment of tax. However, it is not necessary to enter into any discussion in that regard, inasmuch as, in the present case, the amount deposited by the respondent is not under subsection (4) of section 73 of the GVAT Act, nor has the appellate authority passed any order under the proviso to subsection (4) of section 73 of the GVAT Act. 15. In the facts of the present case, this court, in exercise of powers under Article 226 of the Constitution of India, has directed the respondent to make a pre-deposit of 50% of the tax amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in excess of the amount due from him. Provided that, the Commissioner shall first apply such excess towards the recovery of any amount due under the Act or the earlier laws and shall then refund only the balance amount, if any; provided further that no adjustment under the provision shall be made towards a recovery of an amount due that has been stayed by an appellate authority. On a perusal of the provisions of section 36 of the GVAT Act as a whole, there is nothing therein to indicate that the same requires an application to be made prior to refund of any amount by a person. Moreover, what section 36 of the Act contemplates is refund of any amount of tax, penalty and interest paid by a person in excess of the amount due from him. In the facts of the present case, the amount paid by the respondent is by way of a pre-deposit pursuant to the above order passed by this court, which in terms of the said order, would enure till the final disposal of the appeals. Therefore, such amount cannot be termed as an amount of tax paid as envisaged under sub-section (1) of section 36 of the GVAT Act. 19. Section 37 of the GVAT Act makes provision for provisional refund and section 38 makes pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Company. 21. As noticed earlier, the amount deposited by the respondent Company is in the nature of pre-deposit. As is explicit on a plain reading of the order dated 28.03.2006 made by this court in Special Civil Application No.14422 of 2005 and allied matters, such pre-deposit would enure till the final disposal of the appeals. The respondent Company having succeeded in the appeals whereby the Tribunal has held that there is no liability to pay tax, the petitioner has no legal authority to hold on to the amount deposited by the respondent by way of pre-deposit for stay of recovery of the demand that had arisen under the orders impugned before the Tribunal. As held by the Bombay High Court in the case of Suvidhe Ltd. v. Union of India (supra), a deposit under section 35F of the Central Excise Rules and Act, 1994 is not a payment of duty, but only a pre-deposit for availing the right of appeal. Such amount is bound to be refunded when the appeal is allowed with consequential relief. On the same analogy, the amount deposited by the respondent being in the nature of pre-deposit and not payment of tax under the provisions of the Sales Tax Act, the amount deposited by it is bound t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Gujarat Value Added Tax Tribunal Regulation, 2008 shows that the same contains provisions which are in pari materia to that of the Gujarat Primary Education Tribunal (Procedure) Order, 1987. Regulation 44 bears the heading Tribunal to follow provisions of Civil Procedure Code in the matters not provided in these regulations and postulates that the Tribunal shall, in any matter not provided for in these regulations, follow the procedure, as far as it is applicable, laid down in the Code of Civil Procedure, 1908 as may be amended from time to time. Having regard to the similarity of the provisions under two regulations, the court is of the view that the said decision would be squarely applicable to the facts of the present case. 24. Reference may also be made to the decision of the Orissa High Court in the case of Hindustan Aeronautics Ltd. v. Cuttack and others, (2014) 69 VST 310 (Orissa), on which reliance has been placed by the learned counsel for the respondent, wherein the court has made reference to the following observations of the Supreme Court in the case of Smt. Savitri v. Gobind Singh Rawal, AIR 1986 SC 984 : Every Court must be deemed to possess by necessary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l, therefore, cannot, in any manner, be said to come in conflict with any order that may be passed by the High Court in the appeals. Having regard to distinct nature of the proceedings before the High Court and before the Tribunal, it cannot be said that the order passed by the Tribunal lacks propriety. Insofar as the decision of this court in the case of State of Gujarat v. Essar Steel Limited (supra) is concerned, the same would not be applicable to the facts of the present case, inasmuch as, the same was rendered in a totally different set of facts as referred to hereinabove, wherein, though the decision of the Tribunal in the case of ONGC Limited was subject matter of appeal before the High Court, the Tribunal in an appeal against an order of pre-deposit made by the first appellate authority, remanded the matter to the adjudicating authority to decide the same in terms of its previous decision in the case of ONGC Limited, that too, within a stipulated time frame. In the facts of the present case, as noted hereinabove, the controversy before the High Court has nothing to do with the pre-deposit made by the respondent pending the appeals before the Tribunal. Under the circumstanc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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