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TMI Blog2021 (12) TMI 356X X X X Extracts X X X X X X X X Extracts X X X X ..... of 2020 2005-06 6,21,78,915/- 3. 767 of 2020 2006-07 6,02,23,413/- 4. 768 of 2020 2007-08 3,96,92,735/- 3. Though the aforesaid refund claimed were granted to the petitioner vide orders dated 29.06.2020, by further communications dated 07.07.2020 and 11.08.2020 issued by the Deputy Commissioner, Commercial Tax, Sector - 3, Prayagraj, the said authority had adjusted the amount of refund quantified at Rs. 17,45,68,741/- for A.Ys. 2004-05 (beginning 14.10.2004) to 2007-08 (ending 31.12.2007), claimed by the petitioner under the provisions of U.P. Trade Tax Act, 1948 (hereinafter referred to as the 'Erstwhile Act') against the outstanding demand of interest due on delayed payments of entry tax Rs. 18,10,01,347/- for A.Ys. 2003-04 and 2009-10 under the U.P. Tax on Entry of Goods into Local Areas Act, 2007 (hereinafter referred to as the 'Entry Tax Act'). 4. The petitioner challenged the aforesaid adjustment of refund by means of Writ Tax No. 748 of 2020. It was heard and decided on 16.11.2021. That hearing proceeded on an admission made by the revenue that the claim for refund made by the petitioner [as was dealt with vide communications dated 29.06.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal notification dated 27th February, 1998. Accordingly, a writ in the nature of mandamus is issued directing the opposite parties to provide tax exemption to the petitioner industry from the date of production for the period of entitlement under original notification dated 27th February, 1998." 7. On 16.04.2010, the petition filed by the present petitioner being Writ Petition (Misc. Bench) No. 6176 of 2004, M/s Birla Corporation Ltd. vs. State of U.P and others came to be decided by the order dated 16.04.2020 on the following terms:- "Keeping in view the fact that the controversy has been set at rest, present writ petitions too are decided finally in terms of the judgment and order dated 29.3.2010, passed in writ petition No. 5861(M/B) of 2010. No order as to costs." 8. The above judgments, were carried in appeal by the revenue, to the Supreme Court. Vide judgment dated 12.11.2019, in State of Uttar Pradesh and Another vs. Birla Corporation Ltd. (2019) SCC OnLine SC 1569, the Supreme Court dismissed the revenue's appeal with certain observations. Relevant to our issue, paragraph nos. 34 and 36 of the said decisions read as below:- "34. A priori, the respondents and s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessing authority found, no interest was payable to the petitioner on the delayed refund. Thereafter, on 07.07.2020, instead of paying out the refund, the assessment authority of the petitioner issued a further ex-parte communication to the petitioner informing adjustment of the entire amount of refund Rs. 17,45,68,741/- against the outstanding demand of dues of interest on Entry Tax Rs. 18,10,01,347/-, for the A.Ys. 2003-04 to 2009-10. 11. A similar communication giving full details of such adjustments made was issued to the petitioner on 11.08.2020. In such circumstances, the petitioner again wrote to its assessing authority on 31.08.2020 stating, no amount of tax was due against him either under the erstwhile Act or the VAT Act or the Central Sales Tax Act, 1956 (hereinafter referred to as the "Central Act"). It reiterated its demand for payment of refund due. In the present writ petition in paragraph 3, it has been specifically stated, there is no amount of tax outstanding or due against the petitioner under the provisions of the Erstwhile Act or the VAT Act or the Central Act. In reply thereto in paragraph 29 of the counter affidavit, only this much has been stated, on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Erstwhile Act. They have no application to the present facts as refund has been granted under section 40 of the VAT Act. 8. In this regard, reference has been made to a decision of the Supreme Court in Suhas H. Pophale Vs Oriental Insurance Company Limited and Its Estate Officer, (2014) 4 SCC 657. Further, in support of his submission, learned Senior Counsel for the petitioner has relied on another decision of the Supreme Court in National Engineering Industries Ltd. Vs Commissioner of Central Excise Jaipur, (2005) 13 SCC 418 to submit - the refund claim became due on 16.04.2010 upon the earlier writ petition filed by the present petitioner (Misc. Bench No. 6176 of 2004), being allowed. On that date, the Erstwhile Act did not exist. The only statutory law in force was section 40 of the VAT Act. Therefore, only that provision would govern the claim for interest. Under section 40 of the VAT Act the claim for interest may arise upon an order giving rise to refund passed by a Court and it is not dependent on any further or specific order to be passed by the assessing authority to grant such refund. Therefore, the interest liability accrued upon lapse of thirty days from the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an inconsistent duality in the stand adopted by the revenue. 11. In any case, the earlier writ petition being Writ Tax No.748 of 2020 was confined to the issue whether the liability of interest on entry tax could be adjusted against any other refund of trade tax found due to the petitioner. On the other hand, here the issue is to the entitlement of interest on the refund of trade tax that became due upon the earlier order of this Court dated 16.04.2010. We have allowed the revenue to advance submissions that are at variance with the submissions advanced by it in the earlier writ (already decided by us vide order dated 16.11.2021), more out of helplessness, and not out of choice. 12. Having thus heard learned counsel for the parties and having perused the record, in the first place, we may take note of the certain statutory provisions. Under the Erstwhile Act, the provision of refund existed in the shape of section 29 of that Act. A slightly different provision existed in the shape of section 40 of the VAT Act. It would be useful to our discussion, to extract in tabular form the provisions of sections 29 of the Erstwhile Act and 40 of the VAT Act, as below : Section 29. Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchases of such goods unless he proves to the satisfaction of the Assessing Authority that he has not passed on the liability of such tax to any third party as a result of any sale or otherwise. Section 29-A - Procedure for disbursement of amount wrongly realised by dealer as tax (1) Where any amount is realised from any person by any dealer, purporting to do so by way of realisation of tax on the sale or purchase of any goods, in contravention of the provisions of sub-section (2) of Section 8-A, such dealer shall deposit the entire amount so realised in such manner and within such period, as may be prescribed. (2) Any amount deposited by any dealer under sub-section (1) shall, to the extent it is not due as tax, be held by the State Government in trust for the person from whom it was realised by the dealer, or for his legal representatives, and the deposit shall discharge such dealer of the liability in respect thereof to the extent of the deposit. (3) Where any amount is deposited by any dealer under sub-section (1), such amount or any part thereof shall, on a claim being made in that behalf be refunded, in the manner prescribed, to the person from whom such dealer had act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... towards tax or any other amount outstanding against the dealer under this Act or under The Central Sales Tax Act 1956 or under the erstwhile Act and only the balance if any shall be refunded. Provided further that refund, of excess amount of input tax credit, shall, without prejudice to other conditions, be subject to conditions and restrictions of section 15. (2) Where amount found refundable in accordance with the provisions under sub-section (1), is not refunded within thirty days from the date of order of refund passed by the assessing authority or where order giving rise to refund is passed by any other authority or court, from the date of receipt of such order by the assessing authority by due process, the dealer shall be entitled to simple interest on such amount at the rate of twelve percent per annum from the date of such order passed by the assessing authority or from the date of receipt of the order giving rise to refund passed by any other authority or Court, till the date refund is made. Provided that where refund relating to excess amount of input tax credit due on the basis of returns filed by the dealer, is not allowed within the time prescribed under section 15, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to such official, personnel, consular or agent of such mission, United Nations or body, as the case may be. (7) Refund, under any provisions of this Act, may be given by refund voucher or cheque: Provided that where a dealer submits e-tax return, refund of any amount found refundable to him may be allowed through e-cheque. Explanation- For the purposes of this Act, prescribed date shall be deemed to be the date of refund. (8) The amount refundable under the erstwhile Act may be adjusted against the amount of tax or penalty or any other dues under this Act." 40-A. Withholding of refund in certain cases (1) Notwithstanding anything to the contrary contained in any other provision of this Act or in any judgment, decree or order of any Court, Tribunal or other authority, where after giving reasonable opportunity of being heard to the dealer or the person concerned, the Commissioner is satisfied on the report of the assessing authority that,- (a) the dealer has submitted false return of the turnover or has concealed particulars of his turnover or has deliberately furnished inaccurate particulars of such turnover or has prevented the assessing authority or any other competent autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (hereinafter in this section referred to as the repealed enactment) is hereby repealed. (2) Notwithstanding such repeal, - (a) any notification, rule, regulation, order or notice issued, or any appointment or declaration made, or confiscation made, or any penalty or fine imposed, any forfeiture, cancellation or any other thing done or any action taken under the repealed enactment, and in force immediately before such commencement shall, so far as it is not inconsistent with the provisions of this Act, be deemed to have been issued, made granted, done or taken under the corresponding provisions of this Act. (b) any right, privilege, obligation or liability acquired, accrued or incurred under the repealed Act, shall not be affected and (manufacturing units) enjoying facility of moratorium for payment of tax under section 8 (2-A) of the said Act shall be entitled to claim moratorium for payment of tax in accordance with provisions of section 42. (3) Any officer, authorised by the Commissioner under the repealed enactment, to exercise powers under section 10-B and subsection( 6) of section 13-A thereof, shall be deemed to have been authorised by the Commissioner to exercise suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epeal of the Erstwhile Act, the statutory law on rebate claimed by the petitioner under Erstwhile Act did not exist, by virtue of the repeal made. The challenge raised by the petitioner to the notification dated 14.10.2004 issued by the State Government in exercise of its powers under section 5 of the Erstwhile Act was pending consideration in Misc. Bench No. 6176 of 2004. That writ petition came to be decided on 16.04.2010. 16. Since, on the date of repeal, the earlier rebate notification dated 27.02.1998 stood withdrawn and only a challenge thereto was pending before this Court (under Article 226 of the Constitution of India), it may never be said that any right or privilege as to rebate had been acquired or had accrued in favour of the petitioner as may have been protected or saved under section 81(2)(b) of the VAT Act. 17. By way of effect caused by the repeal of the Erstwhile Act and by virtue of section 6(e) of the UP General Clauses Act, 1904, any remedy or legal proceeding if it had been commenced before the repeal (with respect to any right, privilege etc.) would remain intact. However, the proceeding here being a constitutional remedy availed by the petitioner, the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hile Act but of repeal and replacement of the Erstwhile Act itself by a completely new enactment namely - VAT Act. Section 40(1) of the VAT Act only provides for refund of any amount paid by an assessee "in excess of the amount due from him under this Act". Since the disputed amount of trade tax had not been paid by the present petitioner by virtue of any notification and/or provision or proceeding under the VAT Act and, in fact, that deposit was made and the dispute arising therefrom, pre-dated the enforcement of the VAT Act section 40(1) of the VAT Act has absolutely no application to the present facts. 22. Since section 40(1) of the VAT Act is found to be wholly inapplicable viz-a-viz the claim for refund of trade tax for the A.Ys. 2004-04 to 2007-08, the language of section 40(2) of the VAT Act is of no help to the petitioner. That provision of law providing for interest on delayed payment of refund would apply to only those cases that fall under the purview of section 40(1) of the VAT Act, and to no other. That is the plain effect of sub-section (2) of section 40 of the VAT Act. 23. As noted above, neither section 81 of the VAT Act nor section 6 of the U.P. General Clauses A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate of U.P. & Anr. (supra); P.P.G. Asian Paints Pvt. Ltd. Vs. Deputy Commissioner, Commercial Tax & Ors. (supra); Lucent Technology (P) Ltd. Vs. Commissioner, Trade Tax U.P. Lucknow (Full Bench) (supra) and; the Supreme Court decision in Commissioner of Sales Tax, U.P. Vs. Hind Lamps Ltd. (supra). 28. In the present case, the order of refund was passed on 29.6.2020 whereas the refund was adjusted against the demand of entry tax on 07.07.2020 i.e. within the statutory period of thirty (30) days. The merits of that decision apart (considered in our earlier decision dated 16.11.2021 in Writ Tax No. 748 of 2021), for both reasons noted above, the petitioner is found not entitled to interest on the amount of refund of trade tax Rs. 17,90,61,418/-, up to the date 07.07.2020. 29. As to the interest for the subsequent period, we have already provided for that payment at the rate equal to the statutory rate of interest. Such direction (though obtained on an unreconciled concession made by the revenue in that case), may remain referable to the inherent powers of this Court in exercise of jurisdiction under Article 226 of the Constitution of India where, in exercise of equity jurisdiction, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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