9911796707
TMI Blog2017 (9) TMI 1539X X X X Extracts X X X X X X X X Extracts X X X X ..... The petitioner is registered under the Value Added Tax Act ('the VAT Act' for short). 4. The Government of Gujarat issued a notification dated 11.10.2013 in exercise of powers under section 40(1) of the VAT Act authorizing the Commissioner to grant refund to an eligible unit the amount of tax separately charged by a registered dealer from whom such eligible unit has purchased the taxable goods. The notification contained various conditions for granting eligibility certificate, entitlement certificate to an eligible unit and other conditions, upon which, such refund would be granted. We would advert to the relevant conditions later. 5. The petitioner was granted eligibility certificate under the said notification and was granted certificate of entitlement for the total incentive amount of Rs. 1143.24 lakhs for the period between 18.09.2013 to 17.09.2021. The petitioner filed online application in prescribed form for granting provisional refund. The respondent no.1 passed an order dated 26.10.2016 granting provisional refund under section 37 of the VAT Act to the petitioner of a sum of Rs. 1,21,50,000/. On 20.03.2017, the respondent no.1 issued a notice to the petitioner po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ackground, learned counsel for the petitioner raised following contentions: I. Condition no.19 of the said notification nowhere provides that the eligible unit would not be granted refund on purchases made from another eligible unit. It only limits the refund to the extent of the tax actually paid by a registered dealer. II. The respondent no.1 gave no opportunity of hearing to the petitioner before ordering return of the refund already granted. III. In any case, once a provisional refund was granted, the same could be disturbed only under final assessment under subsection (4) of section 37 of the VAT Act. 10. Learned AGP opposed the petition contending that the scheme of exemption is to be read as a whole. The intention of the government can never be to grant refund of tax which has not been paid to the State. If the interpretation of the petitioner is accepted, it would have an effect of net out flow from the government corpus. The scheme therefore has to be interpreted reasonably. Counsel further submitted that show cause notice was issued to the petitioner on 20.03.2017, calling upon the petitioner to satisfy the authority regarding compliance of condition no.19 of the n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the total monetary ceiling of the tax incentives. Paras 11 to 13 of the said notification read as under: "11. The provisional refund shall be granted in accordance with the provisions of section 37 of the Gujarat Value Added Tax, Act, 2003 and rule 37 of the Gujarat Value Added Tax Rules, 2006. 12. The eligible unit shall not be entitled to claim tax credit on the purchases for which the amount of tax refunded under the Gujarat Value Added tax Act, 2003. 13. The refund shall not be claimed by eligible unit until he receives from a registered dealer from whom he has purchased taxable goods, a tax invoice (in original) containing particulars as has been prescribed under subsection (1) of section 60 of the Gujarat Value Added Tax Act, 2003, evidencing the amount of tax." 14. Para 19 of the said notification reads as under: "19. Notwithstanding anything contained in this notification, the amount of refund to an eligible Unit, of tax on any purchase of goods made from the dealer other than an eligible unit availing tax incentives under any scheme granted by the State Government shall not exceed the amount of tax in respect of the same goods, actually paid under the Gujarat V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the petitioner. 16. We have noted that before passing the impugned order, the respondent no.1 had issued a notice on 20.03.2017. This was of course not titled as a show cause notice, nevertheless, it was specified in such notice that he wanted to verify that in the provisional refund granted to the petitioner, condition no.19 was breached or not. He called upon the petitioner to provide details of the purchases made from eligible units and whether any refund on such purchases was claimed. The petitioner also perfectly understood the intention of the respondent no.1 in the said notice and made a detailed representation specifically pointing out that the petitioner would not be aware about the status of a selling dealer and whether he was eligible for any tax exemption under any of the government schemes. In short, the case of the petitioner was that the condition no.19 would not disentitle the petitioner from seeking refund on such purchases. There was no breach of requirement of hearing. 17. The last contention of the petitioner however requires to be accepted. Section 37 of the VAT Act reads as under: "37. Provisional refund (1) If a registered dealer has filed any return ..... X X X X Extracts X X X X X X X X Extracts X X X X
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