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HELLY INFOTECH Versus STATE OF GUJARAT AND 1

2016 (8) TMI 425 - GUJARAT HIGH COURT

Withholding of refund - Assessing Authority held that the petitioner is entitled to refund - revenue stated that mere passing of the order of assessment resulting into refund, would not be sufficient for the assessee to claim such refund and a separate order of refund has to be passed. - power to revise of the order - period fo limitation to revise the order has not expired - Held that: - In addition to the order of assessment which results into refund being payable to the assessee, refund order .....

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ive the same, of course after due verification and passing through other legal processes. - The Commissioner has full period of three years from the date of the order to take the same into suo motu revision. Surely, the department cannot withhold the refund arising out an order of assessment for such full period of three years without any reason. The period of limitation for taking an order in revision cannot be related to the right of the assessee to seek refund arising out of an order of .....

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, the authority referred to in sub section (1) of Section 39 shall, if wishes to withhold such amount beyond 30.09.2016, grant hearing to the petitioner before passing appropriate order in this respect. - Decided partly in favor of petitioner. - SPECIAL CIVIL APPLICATION NO. 7176 of 2016 With SPECIAL CIVIL APPLICATION NO. 9901 of 2016 - Dated:- 5-8-2016 - MR. AKIL KURESHI AND MR. A.J. SHASTRI, JJ. FOR THE PETITIONER : UCHIT N SHETH, ADVOCATE FOR THE RESPONDENT : ME HARDIK VORA, AGP ORAL ORDER .....

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40,67,092/-. In short, under this order of assessment, the Assessing Authority held that the petitioner is entitled to total refund of a sum of ₹ 2,40,67,092/- inclusive of interest. Despite this order, the VAT authorities did not release such refund. The petitioner, therefore, after making representations to the authorities and having failed to get a positive response, filed Special Civil Application No. 7176 of 2016, in which, the only prayer made is for direction to grant refund of the .....

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since they have been seized during a search operation, the petitioner filed a fresh petition being Special Civil Application No. 9901 of 2016 challenging the very notice dated 06.06.2016. 4. With respect to the later petition, learned counsel for the petitioner submitted that the authorities themselves have all the documents mentioned in the said notice. The petitioner is, therefore, unable to produce the same. In any case, the notice was issued only with a view to delay granting of refund. Only .....

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Coming back to Special Civil Application No. 7176 of 2016, however, we cannot countenance the approach of the authority. The authority has filed two replies to justify withholding of the refund. In first such affidavit dated 23.06.2016, it is stated inter alia that: 9. I say and submit that though the assessment gave rise to a refund of ₹ 2.4 crore the refund payment order has yet not been passed by the authorities for payment of refund. Prior to issuing the RPO (Refund Payment Order) the .....

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he first verification was pertaining to the documents of purchases made by the petitioners within the State of Gujarat and the second scrutiny and verification was of documents pertaining to Inter State sale transactions. I say and submit that the petitioner herein had Inter State sale transactions with dealers situated at Hyderabad as well as Jaipur (Annexure- 3), details from the dealers of Hyderabad and Jaipur were called for by the Assistant Commissioner Flying Squad, Unit 6 for due verifica .....

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urn given a report that the verification is in process and the same shall be duly intimated (Annexure-5) and therefore the authorities are on date still to complete the verification and scrutiny of the transactions of the petitioner with dealers situated at Jaipur. 11. I say and submit that in the pendency of this process of verification and scrutiny the petitioner approach this Hon'ble High Court for grant of refund which has arisen due to the assessment order dated 08.05.2015. I say and su .....

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asessment order dated 08.05.2015 giving rise to refund to the tune of ₹ 2.4 crore. The said powers are statutory in nature and the authorities are within their powers to exercise the said provisions as it may affect the Government Exchequer if any of the transactions of the petitioner are found false or fraudulent with a view to void payment of tax and wrongly availing the benefits of Input Tax Credit. 12. I say and submit that as mentioned herein above though the assessment order gives r .....

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12 passed by the Assistant Commissioner of Commercial Tax Circle N, Jaipur (Annexure R1 Copy of the report of the officer, Annexure R2 copy of online returns, R3 copy of Assessment order, Reply from the (Annexure R4) Rajasthan commercial Tax authorities). 8. The details of purchase shown in C form No. 4870199 are false because as per the departmental information received from Rajasthan Commercial Tax Department the said form has been issued to the dealer but the total purchase vide from s.r. No. .....

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t as per the respondents, mere passing of the order of assessment resulting into refund, would not be sufficient for the assessee to claim such refund and a separate order of refund has to be passed. Further, the Joint Commissioner of Commercial Tax has already issued notice for production of documents to ascertain whether the order of assessment has to be taken in revision under Section 75 of the VAT Act and there is sufficient time limit, as per the said statutory provision, still left. The la .....

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see, refund order has to be separately passed. If the order of assessment results into refund, the assessee would be entitled to receive the same, of course after due verification and passing through other legal processes. We, however, do not find any formal stage of passing fresh and specific order of refund before the same can be claimed by the assessee. 9. Regarding the power of the Joint Commissioner to take the order in revision, there is no dispute at all. Section 75 of the VAT Act pertain .....

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he same into suo motu revision. Surely, the department cannot withhold the refund arising out an order of assessment for such full period of three years without any reason. The period of limitation for taking an order in revision cannot be related to the right of the assessee to seek refund arising out of an order of assessment. Such right can be curtailed in terms of Section 39 of the VAT Act which pertains to power to withhold the refund in certain cases and reads as under: 39. Power to withho .....

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terest as provided under section 38, if as a result of the appeal or further proceeding he becomes entitled to refund. 10. Thus, under sub section (1) of Section 39 where an order giving rise to a refund is the subject matter of an appeal or further proceeding or where any other proceeding under this Act is pending, and the Commissioner is of the opinion that grant of such refund is likely to adversely affect the revenue, it would be open for him to direct withholding of such refund after giving .....

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y passing an order after giving the dealer, an opportunity of being heard. Unless such order is passed, the refund cannot be automatically withheld. It may be that once the order of assessment is passed, the assessee may have to wait for a reasonable period before he can seek implementation of order of assessment and grant of refund. However, beyond a reasonable period if such refund is to be withheld, the Commissioner must exercise powers under sub section (1) of Section 39, only upon which, hi .....

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