TMI Blog2017 (9) TMI 1539X X X X Extracts X X X X X X X X Extracts X X X X ..... ubsection (4) of section 37 can be disturbed and recovery can be demanded only on final assessment and not otherwise. In can be appreciated that during the assessment, many issues may come up and ultimate tax liability of an assessee can be judged only on final assessment. There cannot be a stand alone assessment of a refund claim in isolation, keeping the rest of the return unassessed. In the present case, no such assessment is framed. In that view of the matter, impugned orders dated 20.07.2017 and 25.07.2017 in both the petitions are set aside - petition allowed - decided in favor of petitioner. - Special Civil Application No. 14329 of 2017 With Special Civil Application No. 14330 of 2017 - - - Dated:- 22-9-2017 - MR. AKIL KURESHI AND MR. BIREN VAISHNAV, JJ. For The Petitioner : Mr. Jaimin R Dave, Advocate For The Respondent : Mr.Chintan Dave, Agp ORAL JUDGMENT ( PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. These petitions arise in common background. We may record facts from Special Civil Application No.14329 of 2017. 2. The petitioner has challenged an order dated 20.07.2017 passed by the respondent no.1Deputy Commissioner of Commercial Tax, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... akhs is granted to the petitioner to be utilized within eight years. Since the petitioner was eligible for refund, online application for refund was made which was provisionally granted after verification of the purchases of the petitioner. The petitioner also contended that there was no breach of condition no.19 in any of the petitioner's refund claims because whether the dealers of the petitioner are also entitled to exemption and whether they themselves had paid the tax or not would not be within the knowledge of the petitioner. The petitioner had made purchases from the dealers registered within the State and had thereby complied with the condition no.19 of the notification. 7. Respondent no.1 did not accept such explanation and passed the impugned order, in which, he analyzed the petitioner's purchases. He noted that the petitioner had purchased goods from dealers who themselves were eligible under the said scheme and the petitioner was granted refund of ₹ 49,74,558/at the rate of 90% of the tax credit of ₹ 55,27,287/on such purchases. According to him, this was in breach of condition no.19 and the refund was erroneously granted and therefore required to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thorize the Commissioner to grant refund of the amount of tax separately charged by any registered dealer to any class of persons who have purchased the goods from such dealer. In exercise of powers under subsection (1) of section 40, the Government of Gujarat issued a notification dated 11.10.2013, the preamble of which reads as under: NOW, THEREFORE, in exercise of the powers conferred by subsection (1) of section 40 of the Gujarat Value Added Tax, Act, 2003 (Guj.1 of 2005), the Government of Gujarat hereby authorizes the Commissioner to grant refund to the eligible unit, of the amount of tax separately charged by a registered dealer from whom he has purchased the taxable goods, subject to the following conditions, namely: 12. As per para 1 of the notification, an eligible unit would be granted refund of tax paid or payable to the selling dealer on its purchases of the goods to be used as raw materials in its industrial unit for which it has obtained the Eligibility Certificate, in the manufacture of the specified goods under certain circumstances. As per para 2, the eligible unit would apply within specified time for grant of certificate of entitlement. The Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... registered dealer from whom the eligible unit has purchased taxable goods. Para 12 provides that the eligible unit shall not be entitled to claim tax credit on the purchases for which the refund is granted. Para 13 which is also important, provides that the refund shall not be claimed by eligible unit until it receives from a registered dealer from whom he has purchased taxable goods, a tax invoice in original evidencing the amount of tax. The entire scheme of exemption thus when read as a whole, makes it clear that what was to be granted by way of a refund to the eligible unit was the amount of tax paid by the unit from a dealer who may have deposited such tax with the government treasury. This intention is manifest in clause 19 read with above noted clauses of the notification. In fact, clause19 put the entire issue beyond any debate by starting with the expression notwithstanding anything contained in this notification . Clause19 of course specifically targets the purchases made by an eligible unit from a registered dealer who is not availing any tax incentive under any scheme granted by the State Government and provides that in such a case, the eligible unit would be entitl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d covered by the said return be taken up as early as practicable and adjust the grant of provisional refund against tax due, if any, as a result of the assessment. ( 4) If, on assessment, the provisional refund granted under subsection (2) is found to be in excess, then such excess shall be recovered as if it is a tax due from the dealer under this Act and the interest on such tax shall be charged at the rate of eighteen percent per annum, for the period from the date of grant of provisional refund, till the date of assessment. 18. Under subsection (1) of section 37 thus, it is open for a registered dealer to apply for a provisional refund pending assessment. Under subsection (2), it is open for the Commissioner by imposing necessary condition to grant such provisional refund. Such provisional refund can be disturbed only in terms of subsection (4) of section 37 if on assessment, the provisional refund granted is found to be in excess. In order to disturb the provisional refund already granted what is therefore necessary is to assess the return of the petitioner. The reference to if on assessment in subsection (4) of section 37 cannot be interrupted as assessment o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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