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2017 (1) TMI 1347 - ORISSA HIGH COURT

2017 (1) TMI 1347 - ORISSA HIGH COURT - TMI - Eligibility to receive interest u/s 14-C on refund - whether during the pendency of the reassessment order in exercise of the powers conferred under Section 12(8) of the Act, the assessee is entitled to get interest from the date of first assessment order under Section 12(1) of the Act? - Held that: - the assessee was conscious about the tax liability and intentionally he has not furnished proper return before the Assessing Officer and subsequently, .....

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ear would be concluded finally. Hence, the contention of the petitioner that it is entitled to get interest from the date of first application, which has been filed by it after the first order of refund of amount has been passed, is not acceptable to this Court - application dismissed - decided against applicant. - O. J. C. Nos. 14041 & 14042 of 2001 - Dated:- 6-1-2017 - Kumari Justice Sanju Panda And Shri Justice Sujit Narayan Prasad, JJ. For the Petitioner : M/s. Jagabandhu Sahoo, S. K. Mohant .....

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14-C of the Act as per the principles decided by this Court in OJC No. 4920 of 2000 vide order dated 14.9.2000 in case of M/s. Hemanta Kumar Chhatoi v. Asst. Commissioner of Sales Tax, on the basis of the petitioner s first application for grant of refund. 3. The brief fact of the case is that the petitioner is a registered dealer under the provisions of the Act, assessed by opposite party no.1 under the provisions of Section 4 (4) of the Act for the assessment year 1993-94, determined the refu .....

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order determined the refundable amount at ₹ 2,25,038/- and ₹ 2,34,292/- in OJC Nos. 14041 of 2001 and 14042 of 2001 respectively. The petitioner after the assessment, had submitted applications for refund, but no order has been passed for refund of the amount on the garb of pendency of reassessment under Section 12(a) of the Act. When the reassessment under Section 12(8) has been passed determining the refundable amount, the petitioner had again filed an application afresh for refund .....

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can only be paid after the assessment would finally be settled. In these cases, although the petitioner is claiming that it is entitled to get interest over the amount, which has been refunded from the date of first application, the same is not sustainable in view of the fact that there is an order for reassessment to be initiated under Section 12(8) of the Act, which itself suggests that the assessee, the petitioner herein, had not submitted it s returns properly and that is the reason the aut .....

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eassessment. 5. Rebutting the argument regarding the statutory provision as contained in Section 14-C of the Act, learned Sr.counsel representing the petitioner has submitted that the said provision is not to disburse the amount of interest from the date of first application, rather the simple interpretation of the said statutory provision would be that when the assessment would be finally determined and came to a stop, then only it can be determined that excess payment has been paid by the asse .....

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get interest from the date of order till the date of payment excluding the period of ninety days. In the light of this submission, it has been submitted by the learned counsel representing the Revenue that the authorities after determining the assessment on the basis of the provision as contained in Section 12(8) of the Act, has refunded the excess amount paid by the assessee within a period of ninety days in OJC No.14041 of 2001 while in OJC No. 14042 of 2001 since it has been paid after seven .....

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udication of the issue involved in this case. The relevant provision for the purpose is the provision of Section 11, which contains for filing of returns requiring every registered dealer and every other dealer, who is liable to pay tax under the Act, or who may be required so to do by the Commissioner by notice served in the prescribed manner, shall furnish such returns, by such dates and to such authorities, as may be prescribed. Section 12 contains a provision for assessment of tax, which sti .....

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f any period are correct and complete, he shall serve on such dealer a notice in the prescribed manner requiring him on a date and at a place to be specified therein either to attend in person or to cause to be produced there any evidence on which such dealer may rely in support of such returns. Section 12(8) contains a provision that if for any reason the turnover of a dealer for any period to which the Act applies has escaped assessment or has been under assessed or, where tax has been compoun .....

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behalf any amount of tax (penalty or interest) so paid by such dealer in excess of the amount due from him under the Act. Section 14-C stipulates payment of interest on refundable amounts, which reads follows: Amounts refundable under section 14, if not refunded within ninety days from the date of receipt of an application in that behalf from the date of receipt of an application in that behalf from the dealer shall carry interest at the rate of six per cent per annum, with effect from the date .....

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nt would be refunded if paid excess of the amount over and above the amount of tax provided that no claim to refund of any tax penalty or interest paid under the Act shall be allowed unless it is made within twenty-four months from the date on which the order of assessment or order imposing penalty as the case may be was passed or from the date of the final order passed on appeal, revision or reference in respect of the order earlier mentioned whichever period is later. Further provided that no .....

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rit applications, had submitted its returns, which has been assessed by the Sales Tax Officer, Cuttack-I East Circle, Cuttack relating to the year 1993-94 raising refund of ₹ 2,53,438/- in OJC No.14041 of 2001 and ₹ 2,41,192/- in OJC No. 14042 of 2001 for the reason that the assessee in these cases were assessed originally under Section 12(4) of the Act for the year 1993-94, which has been subjected to reassessment under the provisions of Section 12(8) alleging the sale suppression o .....

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sponse to which the appellant appeared before him, the Sales Tax Officer is found to have confronted the alleged report to the assessee, who denied the allegation, determined at the time of assessment under Section 12(4) resulting reduction of refund amount against which the assessee being aggrieved filed first appeal. The first appellate authority has passed order by which after finalizing the reassessment, the fact of suppression having been proved, the amount of refund has been reduced. The a .....

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s been denied by the authorities on the plea that the refund is not maintainable since the same was subject to reassessment under the provisions of Section 12(8) of the Act. Moreover, refund has been made within the stipulated period as provided under Section 14-C. 10. The sole question fell for determination in these two cases is as to whether during the pendency of the reassessment order in exercise of the powers conferred under Section 12(8) of the Act, the assessee is entitled to get interes .....

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Ideal Industries Limited v. State of Orissa and others rendered in OJC No. 9087 of 1997. While on the other hand, learned counsel representing the Revenue has relied upon the unreported judgment delivered by this Court in OJC No. 8920 of 1999 disposed of on 27.11.2015 (M/s.Dabur India Ltd. V. Sales Tax Officer and another) and reported judgment of the Apex Court in the case of Commissioner, Commercial and Sales Taxes and others v. Orient Paper Mills and another, 2004 (vol.135) STC at page 19. 1 .....

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oncluded for the particular year which is subject matter of assessment. Since the assessment can only be said to be concluded if on the basis of the returns submitted by the dealer it will be accepted subject to the condition that no decision/ order has been taken by the competent authority in this regard under the provisions of Section 12 (8) of the Act, which contains a provision for reassessment of the returns submitted by the dealer if found that there is suppression of material aspect, then .....

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paid excess amount having been assessed in course of assessment and if not refunded in view of the provisions of Section 14 of the Act, then the assessee would be entitled to get interest if the amount would not be refunded within a period of ninety days and the interest will be payable after expiry of the period of ninety days inclusive of the period of ninety days. 13. The fact of the cases in hand is that the order of assessment initially has been accepted by the competent authority, but subs .....

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it was after seven days of expiry of the period of ninety days, hence, the interest of ninety seven days has been paid. 14. Learned Sr.Counsel for the petitioner has relied upon the unreported judgment, i.e. one passed in OJC No. 4920 of 2000 by a coordinate Bench of this Court, but we after going through the said order have found that this Court has passed order holding therein that the refund flows from the first order, but we have not found from the said order as to whether the said case was .....

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t has been initiated, but the factual aspect of that case is also distinct from the facts of these cases since in that case the order of reassessment has been passed by the revisional authority by appreciating the fact on merit, but here in the instant case, the order of reassessment under Section 12(8) of the Act has been passed on the basis of a vigilance report submitted by the Vigilance Wing of the Sales Tax Department regarding misrepresentation and suppression of fact having been confronte .....

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ct of this case, hence not applicable. The petitioner has also relied upon the un-reported judgment passed by the Full Bench of this Court in the case of Ideal Industries Ltd. V. State of Orissa (supra), but the issue, which has been raised in the instant case, pertains to disbursement of the amount of interest as provided under Section 14-C and the Full Bench of this Court has agreed with the statutory provisions that the assessee is liable to be paid interest in view of the provisions of Secti .....

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f reassessment was on the basis of suo motu revision by the Assistant Commissioner, but however, a coordinate Bench of this Court has directed to refund the amount from the date of the final assessment, i.e. after the assessment having been closed for that particular year. So far as the judgment relied upon by the Revenue in the case of Orient Paper Mills and another (supra) is concerned, although the factual aspect of the said case is altogether different, the same is not relevant for the purpo .....

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ermination of the questions of fact, the Assessing Officer having the order holding that the assessee is liable to pay the tax, which he had not paid and vice versa, the assessee is also entitled to get refund of the amount after the final assessment having been made by the Assessing Officer, and if on final determination, found that the assessee is entitled to get refund, certainly the interest will be paid to compensate the assessee. 17. As we have observed herein-above that it is a case of mi .....

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tion 14 as referred to above, stipulates a condition that in course of pendency of reassessment, the amount would not be refunded either the excess amount paid, penalty or interest until the reassessment is finalized. This clarifies the intent of the legislation that till assessment for a particular year is finalized, the amount would not be refunded since the same is the subject matter of scrutiny and it is only after finalization of the assessment in its entirety for a particular assessment ye .....

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been passed under Section 12(8) of the Act and in course of the reassessment the fact of commission of suppression and misrepresentation has been proved. 19. The fact in the instant case is that the assessee has submitted its return, which was assessed, but subsequently it was found that there is some suppression in submission of return so far as it relates to gross turn-over of the assessee and as such, reassessment order has been directed to be initiated under the provisions of Section 12(8) o .....

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