TMI Blog2022 (11) TMI 1274X X X X Extracts X X X X X X X X Extracts X X X X ..... sons for refusing to grant concessional rate of tax is on the ground that the IOCL has not revised their returns, they have not amended the invoices and not issued credit notes to the writ petitioner. Therefore, it is to be seen that whether there is a necessity for IOCL to file a revised return so as to enable the assessing officer to take note of the Form C declaration and levy concessional rate of tax. A combined and conjoint reading of Section 8(4) of the CST Act and the proviso to Rule 12(7) of the CST rules shows that the necessity to file revised return does not arise. In Radio and Electricals Limited [ 1966 (4) TMI 59 - SUPREME COURT ], the Hon ble Supreme Court held that though the tax under the Act is levied primarily from the seller; the burden is ultimately passed on to the consumer of goods because it enters into price paid by them. The Parliament with a view to reduce the burden on the consumer arising out of the multiple taxation as provided in respect of sales of declared goods which have special importance in interstate trade or commerce and other classes of goods which was purchased at an intermediate stage in the stream of trade or commerce prescribed low ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant. It was further pointed out that the Principle Act does not contain any separate definition of sale price and after referring to the definition of sale and turn over, it was held that there is nothing in those provisions which would indicate that when the dealer collects any amount by way of tax that cannot be part of the sale price and so far as the purchasing dealer is concerned, he pays for the goods what is sellers demand namely price even though it may include tax and therefore there is no reason why the whole amount paid to the seller by the purchaser should not be treated as the consideration for the sale and included in the turn over. Further the Hon ble Supreme Court pointed out that when the seller passes on the tax and the buyer agrees to pay sales tax in addition to the price, the tax is really part of the entire consideration and the distinction between the two amounts tax and price loses all significance. Firstly, the decision cannot be applied to the facts of the case on hand as in the said decision, the Hon ble Supreme Court was considering the constitutional validity of statute which did not contain a definition for sale price . Secondly, in paragraph ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ddique, Adv. Mr. Debasish Ghosh, Adv. Mr. Varun Kothari, Adv.........For the Appellants Mr. Kavin Gulati, Sr. Adv. Mr. Sumeet Gadodia, Adv. Mr. Avi Tandon, Adv. Mr. Avra Mazumder, Adv. Ms. Shilpi Sandil Gadodia, Adv. Mr. Binayak Gupta, Adv. Mr. Sk. Md. Bilwal Hossain, Adv. ..For the Tata Steel Limited Mr. Jaweid Ahmed Khan, Adv. Mr. Bhaskar Sengupta, Adv. Mr. Talha Ahmed Khan, Adv. For the Indian Oil Corporation Limited JUDGMENT (Judgment of the Court was delivered by T.S.SIVAGNANAM, J.) 1. This intra court appeal is directed against the order dated December 6, 2021 in WPA No. 5306 of 2021 filed by the first respondent herein, M/s. Tata Steel Limited (hereinafter referred to as the writ petitioner). The appellants are the Commissioner of Commercial Taxes West Bengal and the Joint Commissioner, Commercial Taxes Large tax payers Unit, Government of West Bengal, who were impleaded as the Respondents No. 2 and 3 in the writ petition. The fourth respondent in this appeal and the first respondent in the writ petition is the State of West Bengal represented by the Secretary, Department of Finance, Government of West Bengal who has been shown as the proforma res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rification and in that event HSD shall refund to the petitioners the amounts so refunded within 15 days from the date of receipt of such amount by the Respondent State Government of West Bengal subject to proper indemnification by the petitioners and the Respondents State Government of West Bengal. The following facts to suffice to decide this appeal. 3. The writ petitioner is a registered dealer under Section 7 of the Central Sales Tax Act, 1956 (The CST Act), in the State of Jharkhand and are engaged in the business of manufacturing and mining. The writ petitioner purchased HSD from IOCL by way of interstate sales from the State of West Bengal to the State of Jharkhand. Prior to 01.07.2017, the writ petitioner was issued Form C declaration by the State of Jharkhand which was submitted to IOCL, who in turn submitted the same to the prescribed authority in the State of West Bengal to claim concessional rate of tax in terms of Section 8 of the CST Act. With effect from July 1, 2017 the definition of goods as defined under Section 2(d) was amended by Taxation Law (Amendment) Act, 2017. On October 11, 2017, the State of Jharkhand issued a circular stating that Form C decl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lled to pay the same in spite of having obtained Form C declaration for the purchases effected during the relevant period. The writ petitioner was also issued provisional credit notes/credit notes by the IOCL. The writ petition which was filed by the writ petitioner herein before the High Court of Jharkhand, challenging the circular dated October 11, 2017 was allowed and the circular was quashed by judgment dated August 28, 2019. In the said judgment, the Court observed that pursuant to the interim order passed in the writ application Form C declaration having been issued to the writ petitioner and provisional credit notes have also been given by the IOCL, to the writ petitioner and that being an admitted case, it was held that the provisional credit notes given to the writ petitioner shall be given effect to, or in any case in which the provisional credit notes have not been given, the required refund shall always be given to the writ petitioner. Further it was observed that if the respective oil companies have made deposit to the state exchequer, they shall also be entitled to claim the refund thereof. 6. The assessment in the case of IOCL was completed by order dated June ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the writ petitioners therein cannot be governed by the judgment of the High Court of Gujarat in the aforementioned matter. 7. The writ petitioner filed representation dated December 29, 2020 to the appropriate authority to refund excess amount of CST collected by the State of West Bengal for the period from 01.04.2017 to 31.03.2018 through IOCL who had sold the goods against Form C declaration to the writ petitioner which can only be at the concessional rate of tax as against the full rate of tax wrongly collected. It appears that the representation was not considered and the writ petition was filed before this Court by M/s. Tata Steel Limited for the aforementioned relief. The said writ petition along with the other connected matters was allowed by common order dated December 6, 2021 which is impugned in this appeal. The learned Single Bench framed nine issues which in the opinion of the Court was both factual and legal. The issues were elaborately framed which have been concisely reframed by the learned Advocate General in the following terms:- Issues:- (i) Locus Standi of the writ petitioner/purchasing dealer to maintain the writ petition for refund of excess CST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ealer has no locus to maintain the petition, is not entitled to claim refund from the authority in the State of West Bengal as the purchasing dealer has no liability to pay tax under the CST Act as it is the only liability of the seller, IOCL; liability of the purchasing dealer arises out of the contract with the selling dealer and there is no statutory liability on the purchasing dealer as the selling dealer may or may not chose to recover the taxes paid by him from the purchasing dealer; it is only a selling dealer who is given the privilege of concessional rate of tax by virtue of Section 8(1), 8(3) and 8(4) of the CST Act; the selling dealer does not act as agent of the State of West Bengal for collection of tax. Referring to Section 6,7,8 and 9 of the CST Act, it is submitted that there is no liability imposed on the purchasing dealer under the CST Act and the concessional rate of tax in terms of Section 8 is given only to the selling dealer and there is no right recognized in favour of the purchasing dealer. Similarly, Section 9 of the Act provides for levy and collection of tax only from the selling dealer. 10. Referring to Section 60 of the West Bengal Sales Tax Act (WBS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner. 13. Section 9A of the CST Act was also referred to state that the said provision does not impose any liability on the purchaser to pay sales tax, nor does it require the seller to pass on sales tax liability to the purchaser. Further, it was submitted that in M/s. George Oakes Private Limited, it has been held that merely because a dealer is unable to pass on the tax does not mean that the tax is imposed by the Government on the purchaser or that the seller is a mere collecting agency for the Government. 14. It is further submitted that the learned Single Bench had also referred to Section 37 of the WBST Act and held that the purchasing dealer is entitled to maintain a claim for refund before the Commissioner. It is submitted that Section 37 is not applicable to the facts of the case as the case on hand does not relate to excess tax paid to the authority. The said provision relates to excess amounts collected by the selling dealer from the purchaser in contravention of the provisions of the act and not deposited to the authority as tax and only in those situations the selling dealer is obligated to deposit the excess amount collected to the RBI or the Government Treasur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... does not act as the agent of the State. Therefore, the finding to the contrary rendered by the learned Writ Court is required to be set aside. 17. Reliance was placed on the decision in Saraf Trading Corporation and Others Versus State of Kerala (2011) 2 SCC 344 wherein it was held that only a person entitled under the law to claim a refund can do so. In the said decision, the Hon ble Supreme Court was considering Section 44 of the Kerala General Sales Tax Act, 1963 which is similar to Section 60 of WBST Act. The Hon ble Supreme Court held that a purchasing dealer would not have right to claim a refund when the statute allows the refund to be made only to the selling dealer and the Court will not take a pro-active stance and grant refund to a purchasing dealer de hors the provisions of the statute, even though the burden of tax may have been passed on by the selling dealer to the purchasing dealer. Therefore, it is submitted that in terms of Section 60 of the WBST Act only the selling dealer is entitled to claim refund. Therefore, it is submitted that the decision in Saraf Trading Corporation is clearly applicable to the case on hand. 18. The learned Advocate General to s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or any entitlement of the writ petitioner or IOCL to get refund. Further, there was no positive direction or finding by the Jharkhand High Court to the effect that the writ petitioner was entitled to recover tax from the sales tax authorities in West Bengal or that the State authority is under an obligation to refund the tax collected from the writ petitioner. This aspect was clarified in the order passed by the Court in the review application stating that it is only the oil companies that are entitled to claim refund. In any event, the decision of the High Court of Jharkhand is not binding on the State of West Bengal as it was not a party to the said proceedings. To support the contention that the decision will not bind a non-party to the litigation, reliance was placed on the decision in Census Commissioner Versus R. Krishnamurthy (2015) 2 SCC 796 and Kulwant Singh Others Versus Daya Ram Others (2015) 3 SCC 177. 24. Further it is submitted that the decisions of the other High Courts are not applicable in the case on hand for several reasons and more particularly, have not taken into consideration the decisions of the Constitution Bench of the Hon ble Supreme Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Sons AIR 1966 SC 1738, Kandla Export Corporation and Another Versus OCI Corporation and Another (2018) 14 SCC 715 and Fuerst Day Lawson Limited Versus Jindal Exports Limited (2011) 8 SCC 333. 29. Further, for the proposition that a concession can be claimed strictly in the manner provided for in the statute, reliance was placed on the decisions of the Hon ble Supreme Court in India Agencies (Regd.) Bangalore Versus Additional Commissioner of Commercial Taxes, Bangalore (2005) 2 SCC 129 and Ald Automative Private Limited Versus Commercial Tax Officer now upgraded as Assistant Commissioner (CT) and Others (2019) 13 SCC 225. It is further submitted that the learned Writ Court has not held that IOCL has not claimed the concessional rate of tax in terms of the provisions of the statute. 30. For the proposition that assessment order can be set aside only by following the provisions of the statute, reliance was placed on the decisions of Hon ble Supreme Court in State of Madhya Pradesh Versus Haji Hasan Dada AIR 1966 SC 905 and Sales Tax Officer, New Delhi Versus East India Hotels Ltd. And Anr. (1988) 9 SCC 662. 31. It is submitted that Act nowhere provides ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purchasers or not, for which there was no reply given by IOCL. Therefore, merely because IOCL had stated that it would give effect to the provisional credit note after receiving refund from the State of West Bengal, it does not create any obligation on the State. 35. With regard to the finding of learned Writ Court that Article 265 of the Constitution was violated, that withholding the excess tax would amount to unjust enrichment for the State of West Bengal and therefore would justify granting relief under Article 226 of the Constitution, it is argued by the learned Advocate General that Article 265 would not stand in the way if refund of tax would unjustly benefit the assessee (IOCL) who has already passed on the burden of such tax. It is on the person claiming refund to establish that he has not passed on such burden of tax. In this regard, reliance was placed on the decision of the Hon ble Supreme Court in Mafatlal Industries and Others Versus Union of India (1997) 5 SCC 536. 36. Further it is submitted that there is no question of unjust enrichment of the State. The benefit being a concession could be claimed upon strict compliance of the conditions. That apart, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2005) 6 SCC 499, State of Madras Versus Radio and Electricals Limited Another AIR (1967) SC 234, State of A.P. Others Versus M/s. Hyderabad Asbestos Cement Production Limited Others (1994) 5 SCC 100 and Corporation Bank Versus Saraswati Abharansala Another (2009) 1 SCC 540. 40. It is submitted that Section 30(2) of WBST Act stipulates the period for filing a return and Section 30(6) for filing revised return, and by the time Form C declaration became available to the writ petition the time stipulated to file revised return had long expired. The law does not compel an impossibility ( Cochin State Power and Light Corporation Limited Versus State of Kerala AIR 1965 SC 1688 ). Further by placing reliance on the decisions of the Hon ble Supreme Court in Deputy Commercial Tax Officer, Park Town Division, Madras Another Versus Sha Sukraj Peerajee 45 and Commercial of Wealth Tax, Meerut Versus Shravan Kumar Swarup Sons (1994) 6 SCC 623, it is submitted that filing of returns is only a part of machinery provision and cannot override the substantive claim of concessional rate of tax. 41. For the proposition that the purpose of assessment proceedings before the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rate of tax is to enure in favour of the writ petitioner and therefore being person aggrieved have locus to maintain the writ petition; this aspect was conceded by the State of West Bengal before the learned Writ Court. Further the plea of alternative remedy was only raised against IOCL and not the writ petitioner. The State has stated that the writ petitioner is not a dealer, it cannot file a statutory appeal against the assessment order of IOCL. IOCL has taken a stand that the writ petitioner can pursue its claims against the State of West Bengal. Thus, the writ petitioner cannot be left without a legal remedy and cannot be driven from one forum to another. To support such argument, reliance was placed on the decisions of the Hon ble Supreme Court in Union of India Versus Hindalco Industries (2003) 5 SCC 194, and Ghanshyam Mishra and Sons Private Limited Versus Edelweiss Asset Reconstruction Company Limited Others (2021) 9 SCC 657. 45. The following decisions were relied on for the proposition that payer of tax is entitled to challenge the excess levy/collection of tax. I.D.L Chemicals Limited Versus Union of India Others (1996) 5 SCC 373 Jharkhand Sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 2(f). The determination of turnover is provided in Section 8A of the CST Act. This provision provides for the tax received by the seller to be deducted from the turnover. The proviso to Section 8A clarifies that if the amount of tax received by the seller has already been deducted from the aggregate sale price, then a second deduction would not be permissible. Thus, this Section clearly points out that tax received by seller is not part of turnover unlike the cases in George Oakes and Central Wines. 49. It is further submitted that Section 9A of the CST Act mandates that the seller will not make any collection of tax except in accordance with the Act and the Rules made thereunder. This collection of tax by the seller from the buyer is clearly contemplated. If the purchasing dealer produces Form C , the selling dealer is obligated to collect only a concessional rate of tax. If the seller contravenes Section 9A, he would be visited with penalty under Section 10(f) of the CST Act, similarly if the buyer contravenes any of the provisions relating to the goods purchased at a concessional rate penalty is attracted under Section 10(a) to 10(e) of the CST Act. A combined readin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e writ petitioner which decision was affirmed in Mafatlal. 54. Reference was made to the decision of the Hon ble Supreme Court in State of Maharashtra Others Versus Swanstone Multiplex Cinema Private Limited (2009) 8 SCC 235, wherein the Hon ble Supreme Court directed that the excess duty collected by the State Government would go back to the buyers from whom it was collected. Reliance was also placed on the decision of the West Bengal Taxation Tribunal in Steel Authority of India Versus ACCT, Durgapur MANU/ST/0016/2007, wherein among other things it was held that buyer can certainly move an application to the Commissioner for refund of the excess tax deposited and the State of West Bengal would be obliged to refund the excess tax collected by the buyer. 55. Distinguishing the decision in Saraf Trading Corporation, it is submitted that in the said decision Section 44 of the Kerala General Sales Tax Act, 1963 was considered which is materially/significantly different from Section 37(3) of WBST Act. It is submitted that learned Advocate General referred to Section 46A(2) of the Kerala General Sales Tax Act which provision was not considered in Saraf Trading Corporatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nother (1984) SCC Online Mad 374 , it was held that the judgment in Haji Hasan Dada would be inapplicable where the assessment order was under challenge. 58. It is further submitted that the circular dated 01.11.2018 issued by the Government of India directing all State Governments / Commissioners of Commercial Taxes to follow the decision in Capro Power Limited is not contrary to any judgment of any court nor does it interprets the scope of any statutory provision. The State of Jharkhand did not accept the Circular as is evident from the judgment in Tata Steel Limited, Jamshedpur, the Hon ble Court therefore, interpreted Section 2(d) and 8(3) of the CST Act to hold that the writ petitioner was entitled to Form C . Furthermore, the State of West Bengal by Circular dated 07.08.2018 directed the continuance of issue of Form C as was done prior to 01.07.2017, though other state governments declined to issue Form C after 01.07.2017, therefore the present stand taken by the state of West Bengal in these proceedings is diametrically opposite to what was taken earlier. With the above submissions Mr. Gulati concluded. 59. Mr. Khan, learned Counsel for IOCL, while adopting the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the appellant is grossly misplaced. The doctrine does not forbid the refund of excess collection to the person who bears the actual burden. The learned Counsel adopts the arguments of Mr. Gulati on this aspect. 62. It is submitted that the statutory scheme as contained in Section 37 of WBST Act, envisages the excess amount deposited into the state exchequer would be refunded to the buyer who has borne the burden. The appropriation of the money by the state of West Bengal would be hit by Article 265 of the Constitution. It is submitted that the argument as advanced by the state of West Bengal before this Court is similar to the argument made by state of Gujarat in the case of J.K. Cements which was rejected by the High Court of Gujarat and refund was allowed to the buyer. 63. Mr. Khan, placed reliance on the judgment of the Hon ble Division Bench of the High Court of Mysore at Bangalore in Giridharlal Parasmal Versus the State of Mysore (1967) 20 STC 64 and referred to paragraph 6 wherein it was pointed out that the duty of the assessing officer is not merely to impose tax that is lawfully excisable but also to give the assessee the benefit of any reduction or exemption ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was a statutory obligation on the purchaser to pay market fee. Further it is reiterated that in R.S. Joshi the Hon ble Supreme Court notes a provision like Section 37 of WBST Act and holds that it would apply to a case where the tax is collected and kept as his by the selling dealer and not where the tax has been deposited with the state. 68. With regard to the decision in I.D.L Chemicals, Jharkhand State Mineral Development Corporation Limited Versus Central Coalfield Limited and Others in WP(C) No. 3318 of 2018 , High Court of Jharkhand and Indian Explosives Limited, it is submitted that the obligation to pay tax was on the buyer. 69. It is reiterated that the circular dated 01.11.2018 is only a direction to the states where the purchasing dealers are situated and cannot be construed as a direction where the purchasing dealer is situated, hence cannot be construed as a direction to the State where the selling dealer is situated and in no way relates to the locus of the purchasing dealer to maintain an action for refund against the seller s state. The decision in Tata Chemicals relied on by the writ petitioner for grant of interest on the refund, is sought to be disting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cting the Form C declarations. 73. Section 8 of the CST Act deals with the rate of tax on sales in the course of inter-state trade or commerce. Sub-Section (1) of Section 8 states that every dealer, who in the course of interstate trade or commerce, sells to a registered dealer goods of the description referred to in Sub Section 3 of Section 8 shall be liable to pay tax under the Act which shall be 2% of his turn over or at the rate applicable to the sale or purchase of such goods inside the appropriate state under the Sales Tax Law of that state, whichever is lower. In terms of the proviso, the Central Government may by notification in the official gazette reduce the rate of tax under Sub-Section (1). Sub-Section (2) of Section 8 states that the tax payable by any dealer on his turn over in so far as the turn over or any part thereof relates to the sale of goods in the course of interstate trade or commerce not falling within Sub-Section (1) of Section 8, shall be at the rate applicable to the sale or purchase of such goods inside the appropriate state under the Sales Tax Law of that state. The goods referred to in Sub Section 1 of Section 8 of the Act on which the liability ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... satisfied that IOCL was prevented by sufficient cause from furnishing such declaration form within the time stipulated under Rule 12(7). The appellant/state also do not dispute the correctness of the Form C declarations submitted by the IOCL which were furnished to them by the writ petitioner. The reasons for refusing to grant concessional rate of tax is on the ground that the IOCL has not revised their returns, they have not amended the invoices and not issued credit notes to the writ petitioner. Therefore, it is to be seen that whether there is a necessity for IOCL to file a revised return so as to enable the assessing officer to take note of the Form C declaration and levy concessional rate of tax. A combined and conjoint reading of Section 8(4) of the CST Act and the proviso to Rule 12(7) of the CST rules shows that the necessity to file revised return does not arise. 74. In Arulmurugan and Company, the question which was referred for the decision before the Full Bench was whether the appellate authority can entertain Form C declarations filed by the registered dealer at the appellate stage either under the CST Act or the Rules made thereunder. While answering the qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing by the tribunal that there has been sufficient cause leading the scrutiny of the C Forms alone to be undertaken on remand. Further it was held that the tribunal may, if satisfied about the sufficient cause set aside even the assessment order and direct the assessing authority to redo the assessment in which event there would be no occasion for the assessing authority to go into any question of delay in filing the C Form for with the setting aside of the assessment the whole thing is once again at large. 75. In Gujarat Ambuja Cement Limited, the Hon ble Supreme Court pointed out that under Rule 12(7) of the CST Rules, the declaration forms can be filed at a subsequent point of time and not necessarily along with returns. On application being made before the assessing authority, the exemption can be granted. It was held that the object of the rule is to ensure that the assessee is not denied the benefit which is available to it under law on a technical plea and the assessing officer is empowered to grant time which means that the provisions requiring filing of declaration forms C along with the return is a directory provision and not mandatory provision. The declarations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is under the Act authorised to collect from the purchasing dealer as amount payable by him as tax on the transaction and he can collect the amount only in the light of the declaration mentioned in the certificate in Form C , he cannot hold an enquiry whether the notified authority who issued the certificate of registration acted properly or ascertain whether the purchaser notwithstanding the declaration was likely to use the goods for the purpose other than purpose mentioned in the certificate in form C . It was further held that if the purchasing dealer holds a valid certificate the goods which are to be purchased and furnished and furnishes the required declaration to the selling dealer the selling dealer becomes on production of the certificate entitled to the benefit of Section 8(1) of the Act. 77. In M/s. Hyderabad Asbestos Cement Production Limited, after examining the provisions of the Act and the rules particular Sub Rule (7) of Rule 12, it was held that Form C shall be furnished up to the time of assessment by the first assessing authority but in the proper case the prescribed authority which would mean to be the assessing authority may permit such forms to be filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annot be considered as IOCL has not filed revised return or that the invoices have not been amended or credit notes have not been issued is a stand which is legally unsustainable. If the contention raised by the appellant is to be accepted, it will fall foul of Article 265 of the Constitution as the State can levy or collect tax except by authority of law and the rate of tax to be recovered must also be carried out strictly in accordance with law. Therefore, we have no hesitation to hold that the reason for not accepting the Form C declaration was wholly untenable. While on this issue we need to consider as to whether the appellants could have not suited to the claim for concessional rate of tax on the ground that revised return have not been filed by IOCL. Section 30 (2) of the WBST Act prescribed the period for filing the return and Sub-section (6) of Section 30 prescribed the time limit for filing the revised return. Admittedly on the date on which the Form C declaration was filed before the assessing authority of IOCL, the time stipulated for filing revised return under Section 30(6) had expired. If that be so can IOCL be compelled to do an act which is legally impermissibl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g power of the state either under Section 19(1) or Section 19(2)(c) of the said Act. While on this issue, we wish to reiterate that the purpose of assessment proceedings is to correctly asses the tax liability. The Hon ble Supreme Court in National Thermal Power Corporation Limited held that the purpose of the assessment proceedings before the taxing authorities is to assess correctly the tax liability of an assessee in accordance with law. An illustration was given where as a result of judicial decision it was found that a non-taxable item was taxed or an impermissible deduction was denied. It was pointed out that in such circumstances the assessee should not be prevented from raising that question before the tribunal for the first time so long as the relevant facts are on record in respect of that item. Reference was made to the decision in Jute Corporation of India Limited Versus Commissioner of Income Tax (1991) 187 ITR 688, wherein while dealing with the powers of the Appellate Assistant Commissioner it was observed that an appellate authority has all the powers which the original authority may have in deciding the question before it subject to the restrictions or limitati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such materials has come on record subsequent to the making of the assessment; the embargo placed on an assessing officer in considering a new claim would not impinge on the power of the appellate authority or the revisional authority. Similar view was taken in Anugraha Valve Castings Limited. 82. In Areva T and D India Limited Versus Commissioner of Income Tax , the assessing officer, the Commissioner of Income Tax (Appeals) and the Tribunal found fault with the assessee in not filing a return or the revised return raising that the transactions done by them cannot be considered as a sale of business. After noting several decisions including the decision in Goetze India Limited it was held that failure to advert to the claim in the original return or the revised return could not denude the appellate authorities of their power to consider the claim if the relevant material was available on record and was otherwise tenable in law. In Commissioner of Income Tax Versus Perlo Telecommunication and Electronics Components India Private Limited MANU/TN/6874/2021 it was held that the power of tribunal under Section 254 of the Income Tax Act, 1961 cannot be curtailed, after referr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould not claim any refund of the extra amount of CST already deposited by them to the state exchequer in the State of West Bengal and they cannot be made liable to refund the amount to the writ petitioners. By order dated 17.10.2020, the review application was dismissed with an observation/direction that if the refund of the CST deposited to the state exchequer of the State of West Bengal is refused by the State authorities of West Bengal, it is open to the writ petitioners or even to the review petitioners to approach the appropriate forum for the required relief. As pointed out earlier in Capro Power Limited Versus State of Haryana (2018) VIL 154 P H, the assessee similarly placed to that of the writ petitioner before us challenged the orders of the State of Haryana refusing to issue form C declaration in respect of natural gas purchased by them in the course of interstate trade or commerce and used by it for generation of electricity. The said writ petition was allowed holding that the state of Haryana was liable to issue Form C declaration in respect of natural gas purchased by the petitioners therein from the oil companies in the State of Gujarat and used in the generati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18 directed the continuance of issuance of Form C declaration as was done prior to 01.07.2017 though the other State Governments declined to issue Form C declaration on or after 01.07.2017. Therefore, it is rather surprising to note as to the contrary plea being taken before this Court by the State of West Bengal which is diametrically opposite to the stand taken by them in their circular dated 07.08.2018 and as to how understood the legal position. As mentioned above the circular issued by the Central Government dated 01.11.2018 directs the State of West Bengal to follow the decision in Capro Power. The state Government being as an agent of the Central government for levy and collection of Central Sales Tax is bound by the circular. The State of West Bengal did not question the circular issued by the Central Government dated 01.11.2018 in such factual scenario it is specious plea raised by the State of West Bengal before this Court stating that the circular would not bind the State Government and at best the circular is only understanding of the decision of the Court. The State of West Bengal cannot be heard to take such a stand because the decision which was directed to be fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e that the Form C declaration could be accepted at any stage of the assessment proceedings including the appellate stage and revisional stage by sheer dint of ingenuity the appellants have attempted to retain the excess tax collected by taking a stand that the Form C declarations cannot be accepted unless and until the revised return was filed by IOCL which to their knowledge was impossible of being performed. As pointed out earlier, no person can be left without a remedy and none can be compelled to do the impossible. Therefore, the stand taken by the appellant and the State of West Bengal is liable to be outrightly rejected. 84. Learned Advocate General had elaborately made submission with regard to the locus standi of the appellant to file the writ petition. The contentions advanced by the learned Advocate General have been set out by us in the preceding paragraphs. It is not in dispute that the selling dealer IOCL has passed on the tax burden to the purchasing dealer, the writ petitioner. The writ petitioners have specifically averred in the writ petition that they have not passed on the tax burden. As rightly pointed out by Mr. Gulati, the appellants have not specifical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enacted and the petitioner therein had to switch over its registration as dealer under the CGST Act. It is thereafter the State of Rajasthan refused to issue Form C declarations for purchase of HSD at concessional rate despite the fact the commodity was governed by the respective state value added tax laws. In the absence of Form C the writ petitioner there in had to purchase HSD after paying higher rate of tax during the period October 2017 to March 2018. The petitioner filed a writ petition before the Rajasthan High Court seeking refund of the said amount of excess tax paid. The writ petition was allowed. Aggrieved by the same, the state preferred the appeal before the Division Bench which was dismissed and the said decision was upheld by the Hon ble Supreme Court. Subsequently Form C declarations were issued by the State of Rajasthan to the petitioner therein. IOCL informed the petitioner therein that they have deposited the tax with the Haryana Sales Tax Department and they should approach the concerned department for refund of the tax paid by the petitioner therein. Pursuant there to, they approached the authorities in Haryana claiming refund which came to be rejected o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the respondent authorities are not justified in not processing the refund claims of the petitioners. 20. In case of the petitioners, it is an admitted position that the HSD has been purchased by them from Reliance Industries Limited in the course of inter-state trade for use in mining activities and they are, therefore the ultimate consumers thereof and hence, the question of passing on the tax burden to anyone would not arise. Consequently, the question unjust enrichment would also not arise. From the reading of the above-said judgment, it can be safely concluded that the HSD has been purchased by the Petitioner/Company from Indian Oil Corporation in the course of inter-State trade for use in mining activities and therefore, the question of passing of the tax burden to anyone would not arise and the respondent authorities are not justified in not processing the refund claims of the Petitioner/Company. In view of the above-said discussions, the present writ petition is allowed. The respondents are directed to process the refund claim of the petitioner and grant refund of the tax amount collected from the petitioner an deposited by the seller in accordance with la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction between the two amongst taxes and price loses all significance from the point of view of legislative competence. The said decision was also pressed into service to support the contention that the seller is not an agent of the state for collecting the tax. For the same proposition, reliance was placed on the decision in Central Wines and Mahalaxmi Cotton Ginning Pressing and Oil Industries. After referring to the above decisions, the learned Advocate General submitted that the Section 6 of the CST Act makes only the seller liable to pay tax and there is no liability on the buyer. Section 8 provides for concessional rate of tax to be given only to the seller and there is no right recognized in favour of the buyer and Section 9 provides for levy and collection of tax only from the seller. Section 60 of the WBST Act and Section 62 of WBVAT Act provide for refund of excess tax only to be paid to the dealer who was paid such excess tax under the Act namely the selling dealer and there is no right of the purchasing dealer recognized by the statute to claim refund. 87. Thus, we are required to examine as to whether the decisions which was referred to by the learned Advocate Genera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the purchaser should not be treated as the consideration for the sale and included in the turn over. Further the Hon ble Supreme Court pointed out that when the seller passes on the tax and the buyer agrees to pay sales tax in addition to the price, the tax is really part of the entire consideration and the distinction between the two amounts tax and price loses all significance. Firstly, the decision cannot be applied to the facts of the case on hand as in the said decision, the Hon ble Supreme Court was considering the constitutional validity of statute which did not contain a definition for sale price . Secondly, in paragraph 14, the observation made by the Hon ble Supreme Court that distinction between the two amounts, tax and price loses significance is from the point of view of legislative competence. Therefore, the decision in George Oakes cannot be made applicable to the case on hand. In Central Wines, the Court was examining the question whether the amount collected by the seller from the buyer which comprises of two components the actual sale price and the sales tax is a part of turnover and comes within the expression any other sum charged by the dealer whatever be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he determination as mentioned in Section 2(j) has to be in accordance with Section 8A of the CST Act. Sub-Section (1) of Section 8A states that in determining the turnover of a dealer for the purposes of the CST Act, the following deduction shall be made from the aggregate of the sale prices; namely :- the amount arrived at by applying the following formula- rate of tax * aggregate of sale prices 100 + rate of tax 88. The proviso states that no deduction on the basis of the above formula shall be made if the amount by way of tax collected by a registered dealer, in accordance with the provisions of the Act, has been otherwise deducted from the aggregate sale prices. Thus, the proviso prohibits a second deduction from being made. The scheme of the CST Act and in particular by a conjoined reading of Section 2(j) with Sections 8 and 8A clearly shows that the tax received by the seller under the CST Act does not form part of the turnover. This is a very important and distinguishing feature in the scheme of the CST Act which would lead us to hold that the decision in George Oaks P. Ltd. and Central Wines can have no application to the facts of the case. The above asp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seeking refund of the said excess amounts of tax. The state of West Bengal resisted the claim by contending that only the customers from whom the tax had been realized, could seek for refund. The Tribunal referred to the judgment of the Hon ble Supreme Court in Sahakari Khand Udyog Limited Versus Commissioner of Central Excise and Customs reported in MANU/SC/0187/2005 and held:- 9. It is thus clear from the judgment of the Supreme Court in Sahakari Khand Udyog Mandal Limited MANU/SC/0187/2005 that even if there is no restriction or prohibition in the statute, no private person can claim to retain or to enjoy an undue benefit. Doctrine of unjust enrichment is of universal application. It applies even to the state. State is also under an obligation to return any unlawfully or unauthorized realized tax, penalty of interest to the person who has actually paid the same. But as the State holds and spends money lying with it for public interest every individual in the State is directly or indirectly benefited by State expenditure. Unjust enrichment of the State, if any, is in the ultimate analysis, for the benefit of the public at large. Private unjust enrichment serves only pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... njust enrichment is applicable in appropriate cases even for refund under Section 60 of the 1944 Act. It is for the appropriate assessing authority to decide whether doctrine of unjust enrichment is to be applied in a particular case. Thus before directing refund in the manner indicated in Section 60 of the 1994 Act the assessing authorities may follow the procedure and act in the manner indicated below so long as appropriate Rules are not framed: (i) Before directing refund of the determined excess tax the assessing authorities will ascertain whether such excess tax has been paid by the assessee himself/ itself or the assessee has deposited such excess tax after realizing the same from customers/ buyers, shoo were at the time of realization, liable to pay such tax. If it is found that excess tax has been paid by the assessee itself out of its own fund, the concerned authority will pass appropriate order in accordance with Section 60 of the 1944 Act. (ii) In cases where the assessing authority finds that excess tax or non- payable tax has been realized from buyers or customers, he will direct the assessee to submit a statement disclosing particulars of the buyers/ custome ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upreme Court and English decisions and in particular the decision of the Full Bench of the Andhra Pradesh High Court in Government of Andhra Versus East India Commercial Company Limited, ((1957) 8 STC 114 (APFB) and elucidates the concept in the following manner: Broadly speaking, so far as the question of inclusion of sales tax component in the sale- price and for that matter in the turnover , is concerned the sales tax statutes may be divided as under:- (1) Where the statute specifically contains provisions for the inclusion of the amount so collected in the sale price or the turnover, as the case maybe. Such instances would no present with any difficulty. (2) Where there is provision in statute enabling the seller to collect tax and to pass the same onto the Government, the seller acts as if he were acting as an agent of the Government. The amount so collected would not form part of sale price or turnover. (3) Where there is provision in the Sales Tax Statute, permitting a seller to pass on the sales tax to the purchases, the amount collected as sales tax would not form part of the sale price or the turnover. (4) Where the sales tax statute is silent on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom his receipts on account of the sale-consideration an amount equivalent which works out to the rate of tax * aggregate of the sale prices 100 plus rate of tax amount of sales tax. For example, if goods are sold for Rs. 2,000 and sales tax at the rate of 10 per cent. amounting to Rs. 200 is charged thereon, the formula provides for a deduction, out of the total sale- consideration of Rs. 2,200 of Rs. 10*2200 = Rs. 22000 = Rs. 200 100+10 110 By Notification No. G.S.R. 896, dated 23rd September, 1958, rule 11(2) was substituted and this particular deduction was omitted in such substitution. Rule 11(2) was again substituted by Notification No. G.S.R. 770, dated 2nd June, 1961, and the provision for exclusion of tax collected again came in on the basis of the same formula. If, however, sales tax was separately charged in the relative bill, the amount so charged by way of sales tax could itself be deducted without the application of the formula. Later by Section 5 of the Central Sales Tax (Amendment) Act, 1969, Section 8A was introduced, with retrospective effect, in the principal Act providing the same formula for effective deduction of the tax- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act and not deposited to the authority as tax and only in those situations the selling dealer is obligated to deposit the excess amount collected to the RBI or the Government Treasury. It is further submitted that Section 37 does not relate to tax paid to the authorities by the selling dealer for which the selling dealer is entitled to claim refund. Therefore, it is contended that the learned Single Bench s reliance on Section 37(3) to recognize an independent right to refund of tax by the purchaser is wholly misplaced. Section 37 of the WBST Act, 1994 is as follows: (1) No dealer who is not liable to pay tax under this Act shall collect, in respect of any sale of goods by him, any amount of tax under this Act, and no dealer, who is liable to pay tax under this Act, shall make any such collection except in accordance with the provisions of this Act or in excess of the amount of tax payable by him under this Act. Provided that the provisions of this sub-section shall not apply to any dealer who avails of the benefit of exemption from payment o tax under section 39 or the benefit o remission of tax under Section 41, Section 42 or Section 43. (2) If any dealer contravene ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on (2). Likewise, if a dealer who is liable to pay tax, collects by way of tax in excess of the amount payable under the Act, he shall also deposit the same in terms of Sub-section (2). Upon such deposit, when an application is made by the buyer from whom the tax or excess tax was collected by the seller and deposited or in terms of Sub-section (2) of Section 37 is entitled to refund to such buyer the tax or the excess tax as the case may be collected from such buyer and deposited by the dealer. Thus, if Form C declarations produced by a selling dealer are accepted, then it goes without saying that the tax which was recovered from the writ petitioner and deposited by IOCL to the State of West Bengal is a tax in excess of the amount payable as tax and if that be so Section 37 could be applied. While on this issue it is beneficial to refer to the decision of the Constitution Bench in R.S. Joshi. The core of the dispute in the said case was whether it was permissible for the State Legislature to enact a law to the effect that sums collected by the dealers by way of sales tax who are not exigible under the State law, but prohibited by it, shall be forfeited to the public exchequer puni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayment of tax. It has no power in terms of the provisions of the Constitution or otherwise to allow an assessee to collect the tax and retain the same. We will assume that to that effect the provisions are not very clear but the superior courts will not interpret the statute in such a way which will confer an unjust benefit to any of the parties i.e. either the taxpayer or tax collector or the State. The statute must be interpreted reasonably. It must be so interpreted so that it becomes workable. Interpretation of a statute must subserve a constitutional goal. A statute of this nature, in our considered opinion, cannot be interpreted in such a manner so as to enable an entrepreneur to get undue advantage to the effect that he would collect tax from the cinema-goers and appropriate the same. When a person collects tax illegally, he has to refund it to the taxpayers. If the taxpayers cannot be found, the court would either direct the same to be paid and/or appropriated by the State. 97. The learned Advocate General referred to Section 6 of the CST Act and submitted that only a selling dealer is liable to pay tax under the said provision. Reference was also made to Section 60 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... note as to whether the language of Section 44 of the Kerala General Sales Tax Act is similar to the provisions of the WBST Act. On a reading of the Section 44 of the Kerala General Sales Tax Act and Section 37(3) of the WBST Act, we find that the language of both the Sections are different, this aspect of the matter was dealt with by the learned Single Bench elaborately to which we fully agree. This position becomes clear question on a reading of paragraph 8, 9 21, 22 and 23 of the decision in Saraf Trading Corporation, after considering the provisions of the Kerala General Sales Tax, it was concluded that the court cannot overlook the mandate of the provisions of the Kerala General Sales Tax Act which clearly rules that it is only the dealer on whom the assessment has been made can claim for refund of tax and no one else. The learned Advocate General had also referred to Section 46A(2) of the Kerala General Sales Tax Act and submitted that the provisions is similar to Section 37(3) of the WBST Act. Mr. Gulati is right in his submission that if Saraf Trading Corporation the Hon ble Supreme Court was only considering Section 44 of the Kerala General Sales Tax Act as to whether the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fect has been pointed out by the assessing officer of IOCL as could be seen from the order of the assessing officer refusing to extend the benefit of concessional rate of tax. As mentioned above, the concessional rate of tax was denied not on account of any defect in the Form C declarations but on the specious plea that revised return has not been filed by the IOCL which we have held is unnecessary, not required to be done an act impossible of performance. That apart, the learned advocate appearing for the IOCL along with their written submission has produced a list showing that all the form C declarations have been verified by the State Tax Officer and found to be correct. In such circumstances, the writ petitioner has locus standi to approach the court for seeking refund having borne the burden of tax and therefore the contention advanced by the state in this regard does not merit acceptance. Having held so, the next aspect is the purported concession made by the Government Pleader with regard to the locus of the writ petitioner. We are fully satisfied that in law the writ petitioner had locus to maintain the claim for refund and the same having not been acceded to by the Sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecial Leave Petition (C) No. 20572 of 2018 was dismissed by order dated 13.08.2018. Furthermore, the Hon ble Supreme Court also noted that the High Court of Jharkhand on the very same issue in the case of Tata Steel Limited has exhaustively answered all the points which were urged in the case of Ramco before the Hon ble Supreme Court. Furthermore, the Hon ble Supreme Court noted that 9 High Courts have taken the same view and even the decision of the High Court of Rajasthan has been affirmed by the Hon ble Supreme Court as Special Leave Petition (C) No. 27529 of 2019 and connected cases were dismissed by order dated 03.02.2020. After nothing these decisions which were affirmed by the Hon ble Supreme Court it was held that considering the consistent view of 9 High Courts, including dismissal of special leave petitions by different Benches of the Hon ble Supreme Court and being satisfied about the exposition on the matters in issue by the High Court of Madras vide impugned judgment and order being a possible view, the Hon ble Supreme Court declined to interfere with the said order. Furthermore, the Hon ble Supreme Court noted that after the decision in Capro Power Limited the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the state, does not create any obligation on the state. Having held that the writ petitioner who would be entitled to maintain an application for refund and seek for refund to be directly made to them the issue as to whether provisional credit notes were given effect to by IOCL or not has become purely academic. Therefore, nothing turns out of the said submission made on behalf of the state. 102. The learned Advocate General submitted that the finding of the learned Single Bench that withholding the excess tax would amount to unjust enrichment for the State of West Bengal cannot be sustained as Article 265 of the Constitution would not stand in the way if the refund of tax would unjustly benefit the assessee who has already passed on the burden of such tax. Further it is submitted that there is no question of unjust enrichment as the lower rate of tax is only the concession granted by the state which cannot be claimed as a matter of right but strictly in terms of the conditions prescribed for claiming such concession. Further it is only IOCL who can ask for this concession and the writ petitioner cannot claim any right in this regard from the taxing authority. 103. Firstly, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f unjust enrichment would apply only if a tax is collected from the third party which is not the case on hand. On the contrary, if argument of the State of West Bengal is to be accepted then it would tantamount to the State retaining the excess tax collected without authority of law and it would fall foul of Article 265 of the Constitution. 104. The next aspect which was submitted by the learned Advocate General is that if this Court is to decide against the appellant, the State of West Bengal should be permitted to be adjust the refund amount from the amount due from IOCL in terms of Section 60 of the WBST Act. We are unable to persuade ourselves to agree with the said submission. In fact, similar submission was repelled by the High Court of Gujarat in J.K. Cements Limited and we borrow the finding rendered by the Court in paragraph 18 of the judgment to reject the argument made on behalf of the State of West Bengal. That apart, we have held that the writ petitioner is entitled to maintain claim for refund and the contention raised on behalf of the State of West Bengal that refund can be claimed only by IOCL has been rejected. In such circumstances, the refund has to be directl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatutory authority. It is submitted that interest on refund is to be strictly in terms of the statutory provisions and modification of the period of charging such interest in contravention to the provisions of the statute is not called for. Further it is submitted that the writ petitioner had placed reliance on the decision of the Hon ble Supreme Court in the case of Union of India Versus Tata Chemicals Limited (2014) 6 SCC 335 to contend that interest on refund is always available for the excess tax paid and enjoyed by the authorities. It is submitted that the said decision has no application to the facts of the case since the Hon ble Supreme Court was dealing with Section 244A of the Income Tax Act, 1961, the language of which is different from Section 34 of the WBST Act. While it may be true that the language of Section 244A of the Income Tax Act is quite different from that of Section 34 of the WBST Act, the appellant having erroneously rejected the Form C declaration, it goes without saying that retention of the excess tax paid after submission of the Form C declaration is unauthorized and unlawful. Therefore, the writ petitioner would be entitled to statutory interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Sales Tax Act, 1956 and the Form C declarations having been verified and found to be in order by the concerned authority of the State of West Bengal. (5) For the reasons set out above, it is held that the writ petitioners are entitled to claim refund of tax directly from the State of West Bengal and they are not required to make the claim through the selling dealer, IOCL. (6) Refund cannot be denied to the writ petitioners by the State of West Bengal disregarding the fact that excess tax was paid under compelling circumstances namely non-issuance of form C declarations. (7) For the reasons set out above, it is held that the writ petitioner can claim refund directly from the appellants/State of West Bengal having borne the burden of tax which have been collected from the writ petitioner and deposited by IOCL with the Exchequer of the State of West Bengal. (8) The State of West Bengal/ appellants are unjustified in refusing to refund the excess tax as it had been allowing concessional rate to the writ petitioners before and after the disputed period. (9) The circular issued by the Union of India dated 01.11.2018 is binding on the appellants/State ..... X X X X Extracts X X X X X X X X Extracts X X X X
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