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M/s. Hindalco Industries Ltd. Versus The Deputy Commissioner of Sales Tax & Another

2016 (6) TMI 1062 - ORISSA HIGH COURT

Refund of VAT paid earlier - proposal to withheld the same - failure to furnish 'C' form and 'F' form - Forms were furnished before commissioner (appeal) - Held that:- Section 57 of the OVAT Act has been violated but the violation of Section 60 is yet to be found out. When there is notice to show cause issued to a proposal to withhold the refund but there is no order of withholding refund, the natural justice cannot be said to have been violated. - The petitioner directed to attend the perso .....

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onal Standing Counsel (Sales Tax) ORDER Dr. D.P. Choudhury, J. The captioned writ petition is filed by the petitioner challenging the arbitrary action of the opposite parties in not granting refund of tax demand arising out of the first appellate order. FACTS 2. The unfolded story of the petitioner is that petitioner is a registered dealer under the Odisha Value Added Tax Act (hereinafter called OVAT Act ) and also under the Central Sales Tax Act (hereinafter called CST Act ). It carries on busi .....

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x, Sambalpur II Circle, Sambalpur being the Assessing Officer made assessment illegally by not awarding sufficient opportunity to the petitioner to produce balance declaration Form C and F to the tune of ₹ 4,69,57,870/- and ₹ 85,59,51,925/- respectively. Also the Assessing Officer did not allow time for producing certificate in Form-I in respect of sales made to SEZ. Accordingly, on 19.1.2013 the learned Assessing Officer made assessment order and directed to make demand of ₹ 3 .....

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pellate Authority. In the meantime the petitioner requested the opposite party No.1 to refund of tax as demand has been reduced to ₹ 99,851/- against the deposit of ₹ 74,85,310/- during pendency of appeal by the petitioner. 5. It is also stated by the petitioner that the opposite party No.1 is obliged to grant refund within sixty days from the receipt of the appellate order under Section 57 of the OVAT Act with interest accrued under Sub-Section (1) of Section 59 of the OVAT Act. Ins .....

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ties have filed the counter affidavit stating that during assessment proceeding the petitioner failed to file the C Form, F Form and I Form in respect of respective sales. But before the First Appellate Authority the dealer filed C Form, F Form and I Form to the tune of ₹ 20,43,334.00, ₹ 88,45,36,836.00 and ₹ 18,10,241.00, respectively. At the same time, the petitioner failed to file C Forms for ₹ 14,40,453.00 and 17,76,049.00 before the First Appellate Authority. But the .....

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th intimation to petitioner of having an opportunity of hearing on 7.12.2015 and to show as to why the refund shall not be withheld on the ground that State has filed the Second Appeal before the Orissa Sales Tax Tribunal. The petitioner has no ground to file the present petition claiming refund before disposal of Second Appeal. It is submitted to reject the writ petition. SUBMISSIONS 8. It is submitted by the learned counsel for the petitioner that Section 57 of the OVAT Act clearly enshrines t .....

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e parties in this case and there is no finding in the notice issued by the opposite parties that the pre-conditions of Section 60 (1) of the OVAT Act have been complied resulting issuance of notice to withhold the refund. According to him mere filing of Second Appeal is not enough ground to withhold the demand of tax deposited by the petitioner. Mere sending notice is not enough to show the compliance of natural justice and the opposite parties have failed to observe to pass the speaking order b .....

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or Revenue submitted that there is no cause of action for the petitioner to file the writ inasmuch as the petitioner has been given opportunity while it is proposed by the opposite parties to withhold the refund of tax claimed by the petitioner. Section 60 (1) does not direct for issue of a notice while refusing refund of demand of tax. But the opposite parties have taken extra care to issue notice so that the petitioner can submit before the opposite parties and claim the refund on the grounds .....

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pliance of the provisions of law and natural justice. 11. Points for consideration:- The main points for consideration of the case are - (i) Whether the provisions of the OVAT Act have been complied by the opposite parties. (ii) Whether the petitioner is entitled to the reliefs asked for. DISCUSSIONS POINT NO.(i) : 12. It is admitted fact that the petitioner was assessed by the Assessing Officer for the period from 1.4.2011 to 31.3.2012 and the Assessing Officer has passed order for a demand of .....

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VAT Act speaks as follows:- 57. Refund.- (1) Subject to other provisions of this Act and the rules, the assessing authority shall refund to a dealer, within a period of sixty days of the date of receipt of such order giving rise to such refund, the amount of tax, including interest or penalty or both, if any, paid by such dealer in excess of the amount due from him, through refund adjustment or through refund voucher: Provided that the assessing authority shall first adjust such excess amount to .....

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nd of tax. In the present case admittedly he has deposited the entire demand and the First Appellate Authority vide Annexure-2 has directed that the demand is reduced to ₹ 99,851.00 and rest of the amount be refunded to the petitioner. In the present case such action on the part of the Assessing Officer has not been exhibited. 14. Section 60 of the OVAT Act is quoted below for better appreciation:- 60. Power to withhold refund in certain cases.- (1) Where any order giving rise to a refund .....

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r sub-section (1) of Section 59, if he becomes entitled to the refund as a result of the appeal or further proceeding or, as the case may be, any other proceeding, under this Act. The above provision makes it clear that Section 60 has ample power with the opposite parties to withhold refund in certain cases. What are the conditions precedents to withhold the refund has been well described by this Court in the decision reported in the case of M/s. Unit Construction Company Pvt. Ltd. v. The Commis .....

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may not be possible to recover the amount later. With no disagreement with the aforesaid view it has to be found whether the said provision has been complied or not. By going through the materials on record it is found that the First Appellate Authority has passed the order of demand of tax by reducing the demand. Moreover, in this case the Commissioner has not recorded his opinion that such refund is likely to affect the revenue or it is not possible to recover the amount later. Instead the opp .....

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the appeal order passed by the DCST (Appeal), Sambalpur Range, Sambalpur giving rise to the refund under consideration. You are therefore, directed to appear before the undersigned on 27.11.2015 at 11.00 A.m. in his office chamber at Banijyakar Bhawan, Old Secretariat Compound, Cantonment Road, Cuttack and explain as to why the refund so granted by the 1st appellate authority will not be withheld as per provision of section 60 (1) of the OVAT Act. You may produce the documents and records on whi .....

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eal. Even the ground has been spelt out it has to be seen whether by such notice the natural justice has been complied by the Assessing Officer who is undoubtedly a quasi-judicial authority. 15. It is reported in AIR 1990 SC 1984 (S.N. Mukherjee v. Union of India) where Third Lordships observed at para-35:- 35. Reasons, when recorded by an administrative authority in an order passed by it while exercising quasi-judicial functions, would no doubt facilitate the exercise of its jurisdiction by the .....

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e reasons are clear and explicit so as to indicate that the authority has given due consideration to the points in controversy. The need for recording of reasons is greater in a case where the order is passed at the original stage. The appellate or revisional authority, if it affirms such an order, need not give separate reasons if the appellate or revisional authority agrees with the reasons contained in the order under challenge . 16. It is also reported in (1995) 5 Supreme Court Cases 482 (LI .....

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er for the State, its instrumentality, public authority or person whose acts have the insignia of public element to say that their actions are in the field of private law and they are free to prescribe any conditions or limitations in their actions as private citizens, simplicitor, do in the field of private law. Its actions must be based on some rational and relevant principles. It must not be guided by irrational or irrelevant considerations. Every administrative decision must be hedged by rea .....

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ring - it may be implied from the nature of the power - particularly when the right of a party is affected adversely. The justification for reading such a requirement is that the Court merely supplies omission of the legislature (Mohinder Singh Gill v. Chief Election Commissioner: (1978) 1 SCC 405). From the aforesaid decisions of the Hon ble Apex Court, it is clear that every decision either judicial or quasi-judicial must be supported by reasons because by every decision the right of a party i .....

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nized whether in the present case awarding of natural justice has been observed or not. 18. Now adverting to the fact of the case it is found from the notice that the learned Commissioner of Sales Tax has proposed to withhold the refund but no decision has been taken to withhold the refund although Section 57 of the Act clearly awards right to the petitioner to get refund from the Assessing Officer within sixty days of the order of the Appellate Court. 19. Since the aforesaid notice was issued b .....

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his duty for no payment of the refund within sixty days from the date of receiving of the order of the Appellate Court but the refund which has to be paid under Section 60, has been proposed to be withheld for the reasons stated. The show cause notice issued vide Annexure-8 can be termed as a stage before decision taken under Section 60 of the Act and therefore, it cannot be said that Section 60 of the OVAT Act has remained as non-compliance. Thus, the point No.(i) is answered accordingly. POIN .....

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