TMI Blog2019 (6) TMI 893X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment or by way of assessment by the authorities. When the petitioners have deposited the amount of ₹ 46,43,174/under protest for which no adjudication order is passed by the authorities, such claim being outside the purview of enactment can be made either by way of a suit or by way of writ petition. As the amount is paid neither by way of self assessment or pursuant to any demand, it is always open for the petitioners to bring it to the notice of the authorities concerned and claim the refund of amount of such deposit - Since the amount is deposited under protest by the petitioners and no order of assessment, reassessment or revision is passed till date, the amount retained by the authority is not backed by any authority of law in the light of Article 265 of the Constitution of India and, therefore, the respondents have no authority to retain the same. Petition is allowed by directing the respondents to refund the amount of ₹ 46,43,174/with simple interest at the rate of 6% per annum from 11.11.2015, that is three months from 11.8.2015, viz. the date when the first application for refund was made by the petitioner. Such exercise shall be completed by the resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.2 It is the case of the petitioners that such administrative charges were not sale price for the purpose of the GVAT Act since fly ash was supplied free of cost. Therefore, the petitioners neither collected nor paid tax under the GVAT Act on the administrative charges paid to it by the customers as per clause (8) of the Memorandum of Understanding. Respondent No.2 Assistant Commissioner of Commercial Tax conducted audit assessment under section 34 of the GVAT Act for the year 20062007 and the assessment order dated 10.2.2011 was passed wherein no tax was imposed on the administrative charges collected by petitioner No.1 for the fly ash made available by it free of charge to the customers. In the year 2013, an inquiry was made by the respondent VAT authorities with the petitioner No.1 as to why no tax liability was discharged under the GVAT Act on the administrative charges collected by it for supply of fly ash. The petitioners submitted to the authorities that administrative charges were not leviable to tax under the GVAT Act as the supply of fly ash was made available free of cost pursuant to the aforesaid notification and the charges were only in the nature ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anted of the amount deposited under protest for the year 2006-2007. The petitioners therefore, have filed this petition under Article 226 of the Constitution of India with a prayer to direct the respondent authorities to grant refund with interest. 5. Mr. Uchit Sheth, learned advocate for the petitioners submitted that the department has collected a sum of ₹ 46,43,174/for the year 2006-07 without assessing tax demand. The petitioners have deposited such amount under protest on 25.10.2013 and, thereafter, no order has been passed against the petitioners authorising retention of such amount nor any tax was imposed on the administrative charges collected by the petitioners in the assessment order passed for the year 2006-2007. It was further submitted that time limit for reassessment under section 35 of the GVAT Act and revision under section 75 of the GVAT Act had elapsed long back and the respondents have no authority in law to retain the amount deposited by the petitioners under protest without there being any order supporting such retention. It was therefore, submitted that such retention of the amount by the respondent authorities is without authority of law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of taxable turnover may render the assessee liable for any other consequences or penal action as provided by law but cannot attract the liability for payment of penal interest under subsection (3) of section 23 of the Act on the parity of reasoning that if a return of turnover would have been filed on the due date then the tax as per return would have become due and payable on that date. 7. Reliance was also placed on the decision of the Supreme Court in case of J.K. Synthetics Ltd. vs. Commercial Tax Officer reported in 94 Sales Tax cases 422 wherein the Apex Court upholding the minority opinion of Bhagwati J. and overruling the majority decision in case of Associated Cement Co. Ltd v. Commercial Tax Officer reported in (1981) 48 STC 466 (SC) held thus : Bhagwati, J., after referring to sections 3,7,10,11 and 11B of the Act, points out that section 7 (2) speaks of full amount of tax due on the basis of return and adds: ......... We must look at the return actually filed by the assessee in order to see what is the full amount of tax due on the basis of such return. It is not the assessed tax nor is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of India v. A.L. Rallia Ram [1964] 3 SCR 164 at 185 to 190). Our attention was, however, drawn by Mr. Sen to two cases. Even in those cases, Commissioner of Incometax, A.P. v. M. Chandra Shekhar [1985] 151 ITR 433 (SC) and Central Provinces Manganese Ore Co. Ltd. v. Commissioner of Incometax [1986] 160 ITR 961 (SC), all that the Court pointed out was that provision for charging interest was, it seems, introduced in order to compensate for the loss occasioned to the Revenue due to delay. But then interest was charged on the strength of a statutory provision, may be its objective was to compensate the Revenue for delay in payment of tax. But regardless of the reason which impelled the Legislature to provide for charging interest, the court must give that meaning to it as is conveyed by the language used and the purpose to be achieved. Therefore, any provision made in a statute for charging of levying interest on delayed payment of tax must be construed as a substantive law and not adjectival law. So construed and applying the normal rule of interpretation of statutes, we find, as pointed out by us earlier and by Bhagwati, J., in the Associated Cement Company's case [1981] 48 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with reference to levy of tax on fly ash for which the petitioners have not filed any proceedings before any forum. It was therefore, submitted that question of reassessment or revision does not arise because the transactions are not in dispute and once the transactions are reflected, the question of refund does not arise as undisputedly taxability of fly ash and tax to be levied on such sale, is not disputed by the petitioners. It was therefore, submitted that the petition being devoid of merits is liable to the rejected. 11. It is not in dispute that the petitioners have deposited an amount of ₹ 46,43,174/for the year 2006-2007 under protest pursuant to an inquiry made on 2.8.2013. The assessment order for the period from 1.4.2006 to 31.3.2007 was passed on 10.2.2011, wherein no tax was levied upon the fly ash sale. According to the petitioners, fly ash was made available free of cost to bricks/cement manufacturers pursuant to notification dated 14.9.1999 issued by the Ministry of Environment and Forests, Government of India for atleast 10 years from the date of publication of the notification. The petitioners therefore, entered into Memorandum of Understan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the authorities. In the present case, neither of these two situations have arisen. The amount of deposit of ₹ 46,43,174/made by the petitioners under protest is required to be seen in the light of its possible liability of tax which would have been ascertained at a future date. However, such ascertainment of liability has not fructified till date and as such amount of ₹ 46,43,174/deposited by the petitioners under protest would remain in the nature of a deposit only which the Government would hold in trust. Till any assessment order is framed, no such tax liability can be stated to have been ascertained and same therefore, cannot be treated as payment of tax. Therefore, application made by the petitioners for refund of such amount deposited under protest without being crystallized either by way of self assessment or by way of assessment by the authorities towards payment of tax, is liable to be granted. 14. In case of decision of this Court in Shree Associates (supra), an amount of ₹ 50 lakhs was deposited by the petitioner as per the order of the court with the Government and later on when the benefit of remission scheme was granted to the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble on the date on which return was filed by the petitioner. Therefore, in the facts of the present case, the petitioners have not filed any return of income nor any assessment, reassessment or revision order is passed by the respondent adjudicating upon the amount deposited by the petitioners, therefore, same cannot be retained by the respondents. 16. Similarly Supreme Court in case of J.K. Synthetics Ltd. (supra), held that ordinarily the charging section which fixes the liability is strictly construed but that rule of strict construction is not extended to the machinery provisions which are construed like any other statute. When the return is actually filed by the assessee in order to see what is the full amount of tax due on the basis of such return, it is not the assessed tax nor is it the tax due on the basis of a return which ought to have been filed by the assessee but it is the tax due according to the return actually filed. In facts of the present case, when the petitioners have not filed any return of income and in absence of any adjudication of the amount deposited under protest by the petitioner, the respondent authorities cannot retain the same. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioners have made an application for refund for the first time on 11.8.2015 wherein it was stated that the assessment for the year 2006-2007 under section 34 of the GVAT Act was completed in February 2011 accepting the facts and figures as per annual return and VAT audit report. In August 2013, flying squad issued notice in Form 401 seeking details of amount collected towards maintenance of fly ash collection system. The petitioners voluntarily deposited the amount towards tax and interest on administrative charges collected for maintaining fly ash collection system under protest for FY 20062007 to 20102011 for five years. It was conveyed to the petitioners by the flying squad that the jurisdictional ward office would pass the necessary orders in this regard. The petitioners received notices for revision of assessment orders for the financial years 2007-2008 and 2008-2009. Reassessment proceedings for financial year 2009-2010 were completed covering the fly ash related transactions, whereas the transactions for the financial year 2010-2011 were covered under regular assessment order passed under section 34 of the GVAT Act. The petitioners therefore, submitted that no action was ini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ners have deposited the amount of ₹ 46,43,174/under protest for which no adjudication order is passed by the authorities, such claim being outside the purview of enactment can be made either by way of a suit or by way of writ petition. As the amount is paid neither by way of self assessment or pursuant to any demand, it is always open for the petitioners to bring it to the notice of the authorities concerned and claim the refund of amount of such deposit. The authority concerned is also duty bound to refund such amount as retention of such amount would be hit by Article 265 of the Constitution which mandates that no tax shall be levied or collected except by authority of law. Since the amount is deposited under protest by the petitioners and no order of assessment, reassessment or revision is passed till date, the amount retained by the authority is not backed by any authority of law in the light of Article 265 of the Constitution of India and, therefore, the respondents have no authority to retain the same. 21. In the result, the petition succeeds and is accordingly allowed by directing the respondents to refund the amount of ₹ 46,43,174/with simple int ..... X X X X Extracts X X X X X X X X Extracts X X X X
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