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M/s Shri Ram Diesel (India) Versus The Commissioner, Commercial Taxes

2017 (1) TMI 1059 - ALLAHABAD HIGH COURT

Sale of Diesel Engine Pump Sets of less than 10 horse power - demand of tax for the period from October to December, 2008 - tax paid duly and claimed refund - circular dated 5.9.2012 - circular states that realization of tax above 4% together with interest was granted remission provided such amount has not been realized by the seller from its consumers - whether assessee has not realized the tax from its consumers before it can claim any benefit of circular? - Held that: - this is a question of .....

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TMI 613 - ALLAHABAD HIGH COURT], where it was held that mere absence of enabling provision would not be a ground to deny refund of tax, in case tax is not otherwise liable to be realized from the assessee. In case State's action is allowed to stand, it would mean that an honest tax payer would be discriminated since those who have not paid tax have already been granted relief of remission - the authorities were not justified in refusing to grant relief of remission merely on the ground that an e .....

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to levy of demand of tax for the period from October to December, 2008. The revisionist herein is engaged in the activity of selling Diesel Engine Pump Sets of less than 10 horse power, and is duly registered under the provisions of the Act. It appears that a circular was issued by the State of Uttar Pradesh on 5.9.2012, whereby realization of tax above 4% together with interest was granted remission provided such amount has not been realized by the seller from its consumers. The circular dated .....

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revisionist is a sincere tax payer and has complied with the requirement of law, on account of which it is being discriminated, inasmuch as such assessees who have not deposited similar tax are entitled to benefit of remission, but such relief has been denied to the revisionist. Learned counsel has invited attention of the Court to a judgment rendered in Anand Gramodyog Samiti vs. Commissioner Trade Tax, 2005 UPTC 741. Para 16 and 18 of the judgment reads as under:- "16. The said argument i .....

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e is no provision for remission of tax, fee penalty if levied, but since there is no specific provision for refund of tax, no refund of tax can be ordered even if tax was deposited by the dealer out of his own pocket, would lead to absurd situation. Keeping in mind the object of the Circular and the factual background for which it was issued, it is implied that the persons who have not paid tax etc. if already levied, tax etc. shall not be realized and if already paid by a person without passing .....

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al facts and situation posing the issue for resolution is an opportunity for innovation of law. It has observed that the law, as administered by Courts'/transforms into justice. It has quoted the definition of justice mentioned in Justin man's Copus Jurist Civil is (adopted from the Roman Jurist Ulpain) states "justice in constant and perpetual will to render to every one that to which he is entitled". Similarly Ciero described" justice as the deposition of the human mind .....

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in. He must consciously seek to mould the law so as to serve the needs of time.". 18. The argument of the learned Standing counsel that there being no provision for refund of tax in the Circular, therefore, no refund can be granted, is liable to be rejected on another ground. As stated, in the earlier part of judgment that the aforesaid Circular was issued on the representation made by such persons who had not deposited tax. On this basis the Government granted remission from deposit of tax .....

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Cement & Another vs. State of Madhya Pradesh & Others, (2015) 11 SCC 708. Para 6 of the judgment, which is relevant for the purposes, reads as under:- "6. After giving our thoughful consideration to the issue involved, we are of the view that there is force in the submission of the learned counsel for the appellants. The Explanation attached to Notification dated 4.5.1999, or for that mater the Notification dated 5.7.1999, which states that the amount shall not be refunded in any c .....

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sis for creating these two classes and there is no rationale behind it which would have any causal connection with the objective sought to be achieved. It would be pertinent to mention that on repeated query made by this Court to the learned counsel for the respondents, he could not explain or show from any material on record as to what led the authorities to provide such an Explanation. Therefore, it becomes apparent that there is no objective behind such an Explanation appended to the Notifica .....

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f the Constitution of India, in order to hold that collection of tax by the State over and above what is permissible in law would amount to unjust enrichment and would be contrary to Article 14 of the Constitution of India. It is contended on behalf of the revisionist that in the facts of the present case, the orders passed by the authorities are not liable to be sustained inasmuch as the only ground taken to non-suit the revisionist is that there exists no provision in the circular permitting r .....

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esolve the controversy raised in the present litigation, two distinct aspects needs to be noticed and dealt with. The first aspect relates to determination of factual issue as to whether assessee has not realized the tax from its consumers before it can claim any benefit of circular. On this aspect, this Court finds that the revisionist from the very initial stage has been making a specific claim before the authorities that it has not realized any amount of tax from its consumers over and above .....

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e evidence led by the revisionists. In the absence of any finding returned by the authorities on this count, I am not inclined to enter into such factual issue for the first time in exercise of revisional jurisdiction of this Court. For such purpose, it would be appropriate to remit the matter to the assessing authority for a fresh adjudication after affording opportunity of hearing to the revisionist. 9. The second question which arises for consideration is as to whether the relief of remission .....

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