TMI Blog2019 (10) TMI 951X X X X Extracts X X X X X X X X Extracts X X X X ..... nform to the provisions in section 33(2) of the said Act. The provisions in Rule 30 of the said Rules as they stand do not detract anything from section 33(2) of the said Act. In fact, both Rule 30 of the said Rules and section 33(2) of the said Act, operate in their respective fields. It is reasonable to proceed on the basis that 90 days time limit provided in section 33(2) of the said Act is the time limit within which the appropriate assessing authorities must obtain sanction in terms of Rule 30 of the said Rules. However, if for any reason such sanction is not obtained within the period of 90 days from the date of order of refund made under Section 29 of the said Act or within a period of 90 days from the date of receipt of application for refund under section 10(3) of the said Act, the appropriate assessing authority cannot avoid liability or payment of simple interest at the rate of 8% per annum on specious plea that such liability commences only from the date of expiry of 90 days from the date of sanction order under Rule 30 of the said Rules. In the present case, the Petitioner seeks interest only on the amount which has already been sanctioned by the Authorities unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eriod prescribed under the said Act. (B) The Commercial Tax Officer (CTO), made an Assessment Order under Section 29 of the said Act on 29th March, 2011, determining that the amount of ₹ 1,92,91,143/- was refundable to the Petitioner. (C) Since the refund order was not actually implemented for a considerable period of time, the Petitioner addressed communications/representations/reminders dated 18th March, 2013, 3rd March, 2014, 12th March, 2014, 26th March, 2014, 30th April, 2014, 31st January, 2015, 14th April, 2015, amongst others, seeking actual refund. (D) Ultimately, the Petitioner instituted a Writ Petition No.940 of 2015 in this Court, which was disposed of vide order dated 28th January, 2016, directing the CTO to take a decision in the matter, in accordance with law, within a period of three months. (E) In pursuance of the aforesaid direction, the CTO, applied for sanction under Rule 30 of the Goa Value Added Tax Rules, 2005 (the said Rules), which sanction was granted on 1st February, 2016, for an amount, however, of only ₹ 81,19,244/-. This was followed by a refund voucher dated 20th February, 2016 in terms of which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate immediately following the day of expiry of said 90 days period. He submits that the period for refund of ₹ 52,36,030.69 expired on 29th June, 2011 and the period for refund in terms of Section 10(3) of the said Act expired on 24th April, 2008 and 18th July, 2008 respectively. Therefore, he submits that the interest at the statutory rate became payable from the said date and not from the date of sanction order, which, according to Mr. Usgaonkar, is only an administrative order, unconnected with the issue of payment of interest under Section 33(2) of the said Act. 6. Mr. Usgaonkar submits that the amount of ₹ 8,51,594.88 has been incorrectly withheld by the Respondents though in terms of law, the Petitioner, was very much entitled to this amount, being an exporter for the purpose of the said Act. Mr. Usgaonkar submits that in fact, clause 9 of the Goa Value Added Tax Deferment-cum-Net Present Value Compulsory Payment Scheme 2005 (the said Scheme) was quite clear on this aspect. In any case, the Scheme was amended in the year 2016, but with retrospective effect from 1st April, 2005, to clarify that the Scheme also covers to the extent indicated the sales beyon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f any interest. 9. Mr. Pangam submits that the issues relating to payment of tax, refund or even interest on refund are to be determined in accordance with statutory provisions as they are. He submits that there is no scope for any intendment or implications. He submits that such issue, in particular, can never be decided on the basis of any equitable considerations because there is no equity about tax. 10. In so far as the prayer clause (c) of the petition is concerned, Mr. Pangam submits that the issue is in fact pending adjudication before the Authorities under the said Act. He therefore submits that such issue may not be decided by this Court directly for the first time, in the present petition. 11. For all the aforesaid reasons, Mr. Pangam submits that this petition is liable to be dismissed. 12. The rival contentions now fall for our determination. 13. As noted earlier, the main issue which arises for determination in this petition is the date from which the simple interest at the rate of 8% per annum, in terms of Section 33(2) of the said Act becomes payable on the amount refundable under the provisions of the said Act ? ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inter alia provides where a person fails to file a return as required under Section 24 or the Commissioner has reason to believe that the returns filed by a person are not correct and complete; or the Commissioner has reasonable grounds to believe that a person will become liable to pay tax under this Act but is unlikely to pay the amount due; or the Commissioner may make an assessment of the amount of tax payable by the person to the best of his judgment after giving him an opportunity of being heard. Section 29(3) of the said Act provides for the period of limitation within which the assessment is to be undertaken and completed. There are at least four provisos to Section 29(3) of the said Act, out of which first three proviso, are really not relevant for appreciating the issues which arise in the present petition. However, the fourth proviso to Section 29(3) of the said Act provides that where a registered dealer who has filed all the returns for a particular financial year within prescribed time limit, claiming for that financial year,in the said returns, a refund of any amount of tax paid in excess of the amount due from him under the said Act or unduly paid by him and/or for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed Bank account of the dealer. (2)When any amount refundable to any dealer or person under an order made under any provisions of this Act, including refund admissible to an exporter under subsection (3) of section 10, is not refunded within ninety days (a) of the date of such order is made by any authority; or (b) the date of receipt of the order by the authority, if such order is made by any other authority; or (c) of the date of receipt of application for refund under sub-section (3) of section 10, the authority shall pay such person simple interest at the rate of eight percent per annum on the said amount from the day immediately following the day of expiry of the said ninety days to the day of refund: Provided that the interest calculable shall be on the balance of the amount remaining after adjusting out of the refundable amount any tax, penalty or other amount due under this Act, for any year by the person on the date from which such interest is calculable. (Emphasis supplied ) 22. Section 34 of the said Act deals with provisional refund of tax in special circumstances. This provision enables a regi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visions, which will not be relevant to decide the main issue which arises in this petition. 24. In exercise of powers conferred by Section 83 of the said Act, and all other powers enabling it in this behalf, the Government of Goa has framed the said Rules, which inter alia, deal with the aspect of refunds . 25. Rule 30 of the said Rules, which specifically deals with the aspect of refunds is quite relevant to the issue raised in the present petition, and therefore, the same is transcribed herein below for convenience of reference. 30. Refunds.- (1) When any order of assessment under section 29 or re-assessment under section 31 or order of appeal under section 35 or under section 36 or under section 37 a review by Tribunal or under section 38 a revision by High Court or revision by Commissioner or rectification under section 41 results in input tax credit exceeding the tax liability whereby dealer is entitled for refund of tax, penalty or interest paid in excess of the amount due from him and the amount to be refunded does not exceed ₹ 50,000/-, the Appropriate Assessing Authority shall forthwith proceed to refund such amount to the person c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no refund exceeding rupees one crore shall be made without prior approval of the Commissioner] 26. Since the said Act is a taxing statute, interpretation thereof, will have to conform to the principles of interpretation of taxing statutes. The first principle in such matters is that the words of statutes are to be understood in their natural, ordinary and popular sense unless there is something in the context to suggest to the contrary; secondly, in a taxing statute, regard must be held to the strict letter of law; thirdly a fiscal statute will have to be interpreted on the basis of language therein and not de hors the same; fourthly, no words can be added or ignored, and only the language of statute is to be considered for ascertaining the proper meaning and intent of the Legislation. This means that the intent of the Legislation must be gathered from language used in the statute. There is no scope of any implication in such matters; fifthly, so called equitable construction of words of fiscal statute, is impermissible. There is no equity about tax; sixthly, if two views are reasonably possible in a taxing statute, the view which favours the assessee must be preferred. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her amount due under this Act, for any year by the person on the date from which such interest is calculable. 31. Upon plain reading of the provisions in Section 33(2) of the said Act and upon adoption of principles of interpretation of taxing statutes referred to above, it is quite clear that the interest becomes payable on amount refundable to any dealer or person under an order made under the provisions of this Act including refund admissible to an exporter under Section 10(3) of the said Act , if such amount is not refunded within a period of 90 days from the date of order of refund, or in case of an exporter, within 90 days from the date of receipt of application for refund under Section 10(3) of the said Act. 32. Section 33(2) of the said Act does not refer to interest becoming payable upon 90 days from the date of sanction under Rule 30 of the said Rules. Section 33(2) does not say that the interest will be payable if refundable amounts are not refunded within 90 days from the date of making any order under the said Rules. Rather, Section 33(2)(a), clearly refers to order made under the provisions of this Act . Similarly, Section 33(2)(c) refers to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt of over ₹ 50,000/-, must obtain sanction from the appropriate authority under Rule 30 of the said Rules. This also means that the commissioner must have due regard to other provisions of the said Act or the said Rules when it comes to making adjustment in terms of proviso to Section 33 of the said Act. 35. Even the provisions in Section 33(2) of the said Act, are covered by the expression subject to other provisions of this Act....... with which Section 33 (1) of the said Act begins. Therefore, the expression cannot be stretched to suggest that the same will operate to extend the period of limitation prescribed in Section 33(2) of the said Act, particularly when the provisions in Section 33(2) of the said Act are quite clear and unambiguous. 36. The revenue contends that unless and until there is sanction or approval under Rule 30 of the said Rules, the liability to make refunds, does not crystallize. The revenue further contends that unless and until the liability to refund crystallizes, there is no question of any 90 days period under Section 33(2) of the said Act, commencing or beginning to run. Therefore, the revenue contends that it would be inequ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te are clear and unambiguous. The proviso to Section 34(3) of the said Act, very clearly provides that if delay in completing assessment under the said subsection is due to non co-operation of the dealer or non -production of evidence as may be required to be furnished in support of the claim of refund or any other lapse on the part of the dealer the period of delay shall be excluded while computing the period of limitation under the said sub -section and further, such period, shall not be reckoned for the grant of interest, if any, admissible by or under Section 33(2) of the said Act. Thus, where the Legislature intended exclusion of the period attributable to any delay on the part of the dealer, the legislature has made specific provisions to that effect. No such provision is made either in Section 33 of the said Act or in Rule 30 of the said Rules. Therefore, by invoking so called equitable considerations, the Respondents cannot deprive the Petitioner, interest in terms of Section 33(2) of the said Act, where refund is not actually made within the period of limitation prescribed under Section 33(2) of the said Act. 40. The provisions of Section 33(2) of the said Act, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the official gazette on 31.12.2008 says that no refund exceeding rupees one crore shall be made without prior approval of the Commissioner. In the present case, we are concerned with refund for the Assessment Year 2007-08. 42. Rule 30(1) of the said Rules relates to refunds which do not exceed ₹ 50,000/-. Here, there is no requirement of any sanction or approval. However, the appropriate assessing authority, before proceeding to refund such amount, must verify that any amount is due to the dealer, if left unpaid by him, must be adjusted against the amount to be refunded and only the balance is to be thereafter refunded. 43. Rule 30(2) of the said Rules relates to refund which exceed ₹ 50,000/- but not ₹ 2 lakh. Here, the appropriate assessing authority must obtain the sanction of the Assistant Commissioner in charge of or having the jurisdiction over the wards, before proceeding to refund such amount. In cases where the Asst. Commissioner is himself appropriate assessing authority the sanction for refund must be obtained from Addl. Commissioner of the commercial taxes. For the said purpose, he shall submit the case record of the dealer to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the approval order under Rule 30 of the said Rules. As noted earlier, neither Section 33(2) of the said Act, nor Rule 30 of the said Rules says so in clear terms. Further, there is nothing in the said two provisions from which, such a construction can be inferred, by way of implication, assuming that there is any scope for implications in such matters. 46. Besides, even the provisions in Rule 30 of the said Rules, clearly and unambiguously provide, that refunds have to be made by the appropriate assessing authority, upon receipt of sanction forthwith . This militates against the contention raised by the revenue that 90 days period prescribed in Section 33(2) of the said Act, begins to run from the date of sanction order under Rule 30 of the said Rules. If the intention of the Legislature was that the period of 90 days prescribed in Section 33(2) of the said Act were to run from the date of sanction order under Rule 30 of the said Rules, the Legislature, would have said so in clear terms, both in Section 33(2) of the said Act and in Rule 30 of the said Rules. In the absence of any such indication, both in section 33(2) of the said Act and Rule 30 of the said Rules, we ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... res the Act. In this case, the Apex court was considering the potential conflict between rules framed under the Customs Act and a provision of the Customs Act itself. The Apex court proceeded to observe that if there is any conflict between the provisions of the Act and provisions of the Rule the former will prevail. However, every effort should be made to give an interpretation to the Rules to uphold its validity. This can only be possible if the Rules can be interpreted in a manner so as to be in conformity with the provisions in the Act, which can be done by giving it an interpretation which may be different from the interpretation which the rule could have if it was construed independently of the provisions in the Act. In other words, to uphold the validity of the rule sometimes a strained meaning can be given to it, which may depart from the ordinary meaning, if that is necessary to make the rule in conformity with the provisions of the Act. This is because it is a well settled principle of interpretation that if there are two interpretations possible of a rule, one of which would uphold its validity while the other which would invalidate it, the former should be preferred. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plea that such liability commences only from the date of expiry of 90 days from the date of sanction order under Rule 30 of the said Rules. 53. In Ranbaxy Laboratories Limited vs. Union of India and others (2011) 10 SCC 292, the issue which arose before the Hon'ble Apex Court was, whether the liability of the Revenue to pay interest under Section 11-BB of the Central Excise Act, 1944 commences from the date of expiry of three months from the date of receipt of application for refund or on the expiry of three months from the date on which the refund order is made. The Hon'ble Apex Court noted that the provisions of Section 11-BB of the said Act which deal with interest on delayed refund, come into play only after an order for refund has been made under Section 11-B of the said Act. Hon'ble Apex Court, then held that interest under Section 11-BB of the said Act becomes payable if, on expiry of the period of 3 months from the date of receipt of application for refund, the amount claimed is not refunded. Thus, the only interpretation of Section 11-BB that can be arrived at is that the interest under Section 11-BB of the Act becomes payable on the expiry of thre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said Act, the Authorities cannot avoid payment of interest upon expiry of this period, on the specious plea that actual refund cannot be made without sanction under Rule 30 of the said Rules. 56. For all the aforesaid reasons, we hold that the Respondents will have to pay simple interest at the rate of 8% per annum, upon the amount of ₹ 52,36,030.69 towards Interstate/Local Sales for the period between 29.6.2011, i.e. expiry of 90 days from the date of assessment order dated 29.3.2011, till 20.2.2016 i.e. the date of actual refund. Similarly, Respondents will have to pay simple interest at the rate of 8% per annum on the amount of ₹ 28,83,213.31, towards refund of Input Tax Credit/Export Sales with effect from 24.4.2009 and 18.7.2008, on proportionate basis since this is the date which corresponds to the expiry of 90 days from the date of receipt of applications dated 24.1.2008 and 18.4.2008 in terms of Section 10(3) of the said Act. The Respondents are, accordingly, directed to work out the aforesaid interest amount and pay the same to the Petitioner as expeditiously as possible and, in any case, within 8 weeks from today. 57. In so far as the re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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