9911796707
TMI Blog2023 (5) TMI 235X X X X Extracts X X X X X X X X Extracts X X X X ..... e Petitioner was formerly known as the "TML Distribution Limited". Pursuant to order dated 11 March 2022 passed by NCLT, Mumbai Bench V in CA (CAA/255/MB-V/2021) all assets and liabilities of TML Distribution Company Limited have been transferred from transferor company (TML Distribution Company Limited) to the transferee company (TML Business Services Limited). Petitioner is registered under the Maharashtra Value Added Tax Act, 2002 ("MVAT Act") and Central Sales Tax Act, 1956 ("CST Act"). 3. Pursuant to an assessment under Section 23 of the MVAT Act for the financial year 2010-2011, the Assessing Officer passed an Assessment Order dated 30 March 2015, raising a demand of Rs. 17,76,93,422/- including tax and interest. Aggrieved by the same, the Petitioner filed an appeal which resulted in a reduced demand of Rs. 14,00,74,890/-. 4. For the financial year 2011-2012 an assessment order dated 21 August 2017 was passed raising a demand of Rs. 9,67,02,366/- including tax and interest. A first appeal was filed by the Petitioner against this order which resulted in an order for refund of Rs. 10,69,89,606/- on 28 February 2019. It is the Petitioner's case that the said order was rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y be either by deduction of such excess from the amount of tax, penalty, amount forfeited and interest due, if any, in respect of any other period or in any other case, by cash payment: Provided that, the Commissioner shall first apply such excess towards the recovery of any amount due in respect of which a notice under sub-section (4) of section 32 has been issued, or, as the case may be, any amount which is due as per any return or revised return but not paid and shall then refund the balance, if any. (2) If a registered dealer has filed any returns, fresh returns or revised returns in respect of any period contained in any year and any amount is refundable to the said dealer according to the return, fresh return or revised return then subject to rules, the dealer may adjust such refund against the amount due as per any return, fresh return or revised return for any period contained in the said year, filed under this Act or the Central Sales Tax Act, 1956 (74 of 1956) or the Maharashtra Tax on the Entry of Goods into Local Areas Act, 2002. Provided that, for the period commencing on or after the 1st April 2012, a dealer whose refund claim in a year is rupees five lakh or less ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 821/- towards the settlement under the Amnesty Scheme against the dues of Rs. 14,00,74,890/- for the year 2010-2011. It is Petitioner's case that the said email did not mention anything about the amount paid by the erstwhile Petitioner in full settlement of the debt for the year 2010-2011. 13. A Refund Adjustment Order dated 23 May 2019 was received by the erstwhile Petitioner informing that the refund of Rs. 10,69,89,606/- which was due to them would be adjusted towards the amount of tax due for the year 2010-2011. The Defect Notice and the Refund Adjustment Order appear to have been issued by the same officer, viz. Deputy Commissioner of State Tax, PUN-VAT-E-622. 14. By letter dated 5 June 2019, the Petitioner replied to the Defect Notice and recorded that the action of the Respondents in adjusting the refund was unfair and unjust. 15. We have heard Mr. R. A. Dada, learned Senior Counsel for the Petitioner and Ms. Shruti D. Vyas, learned AGP for Respondent-State and with their able assistance, we have perused the papers and proceedings and considered the rival contentions. 16. Mr. Dada, learned Senior Counsel for the Petitioner would submit that the Respondents should hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as per proviso to Section 50 (1), the Commissioner has to first apply any excess towards the recovery of any amount due and after that refund the balance, if any. She submits that accordingly the dues of Rs. 14,00,74,890/-, which were available for recovery since 12 April 2019 were first adjusted to the refund that became available on 10 May 2019 for adjustment and the balance, if any, was to be refunded. Learned Counsel also relies upon the Trade Circular dated 15 May 2019 annexed to the reply, which has been issued as a clarification to the Amnesty Scheme/ Ordinance. Learned AGP refers to question no. 23 of the said clarification in support of her contention. For the sake of convenience, the said question no. 23 along with the answer to the same is quoted as under:- "Q. 23 (1) An assessment order for period 2006-07 and 2008-09 was passed which resulted into additional demand due to disallowance of set-off. Against said orders the assessee has preferred an appeal. The appellate authority has decided the appeal say on 10th April 2019 and for the period 2006-07 determined the refund of Rs. 25,00,000/- and demand of tax and interest of Rs. 10,00,000/- for period 2008-09. In respec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the attention of this Court to Rule 60 of the MVAT Rules, 2005 with effect from 1 April 2005 to submit that in the matter of grant of refund, any adjustment is to be at the desire of the dealer to adjust the refund and that too against tax payable in respect of any subsequent period and not for any previous period as is sought to be done in the present case. Rule 60 of the MVAT Rules, 2005 is quoted as under:- "60. Grant of Refund (1) Application for refund under section 51 shall be made in Form 501. (2) When the Commissioner is satisfied that a refund is due, he shall pass an order in Form 502, showing the amount of refund due and shall communicate the same to the dealer. (3) When an order for refund has been made under any rule, the Commissioner shall, if the applicant desires payment in cash, issue to him a refund payment order either in Form 503 or, in form, 504. If the dealer desires adjustment of refund, against tax payable in respect of any subsequent period contained in the year to which the refund relates under this Act, the Central Sales Tax Act, 1956, or the Maharashtra Tax on Entry of Goods into Local Areas Act, 2003, the Commissioner shall issue a Refund Adjus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall first pay into the Government treasury the extra amount of tax. (4) (a) (i) The amount of tax due where the return or revised return has been furnished without full payment thereof shall be paid forthwith. (ii) the amount of tax which it becomes necessary to pay on account of the reduction in set-off because of any contingency specified in the rules, shall be paid at the time prescribed for making payment of tax for the period in which such contingency occurs. (b) (i) The amount of tax due as per any order passed under any provision of this Act, for any period, less any sum already paid in respect of the said period; and (ii) the amount of interest or penalty or both, if any, levied under any provision of this Act; and (iii) the sum, if any, forfeited and the amount of fine, if any, imposed under the Act or rules; and (iv) the amount of tax, penalty and interest demanded in the context of excess availment of incentives or availment of incentives not due; and (v) any other amount due under this Act, shall be paid by the person or dealer or the person liable therefor into the Government treasury within thirty days from the date of service of the notice issued by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cept for the amounts refunded as aforesaid to the purchasers and except for the amounts in respect of which a set-off or refund is granted, the remaining amount shall, after deducting the expenses of collection and recovery as determined by the State Government, under appropriation duly made by law in this behalf, be entered into, and transferred to, that Fund. (ii) No sum from the Fund shall be paid or applied for any purpose other than the one specified in clause (iii). (iii) The Fund shall be administered in the prescribed manner; and the amount in the Fund shall be utilised for meeting the expenses of any activities related to consumer protection and guidance as the State Government may direct, and for giving grant in the prescribed manner to any voluntary consumer organisation, society, association, body or institution engaged in providing for the better protection of the interests of the consumers and having such qualifications as may be prescribed. (8) (a) Any dealer or person may apply to the Commissioner in the prescribed form for a clearance certificate and thereupon the Commissioner may, on the basis of the record, issue a certificate in the prescribed form within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is only pursuant to the Defect Notice, Petitioner figured out that the excess amount would not be refunded to the Petitioner and it is only on 23 May 2019 pursuant to the Refund Adjustment Order that the Petitioner came to know that the refund of Rs. 10,69,89,606/- granted for the year 2011-2012 would be adjusted towards the amount of tax due for the period 2010-2011. There was no notice whatsoever of this adjustment to the erstwhile Petitioner. 31. These actions of the Respondent Authorities in our view cannot be countenanced. Apart from the general law that no action adverse to a party can be taken without giving the party an adequate notice and an opportunity of defending, the provisions of the MVAT Act also mandate the Respondents to put the Assessee on notice before making any adjustment of refund. Section 32 as quoted above, also appears to suggest this. In our view, the Defect Notice and the Refund Adjustment Order are apart only by a day and this could not have provided sufficient opportunity to the Petitioner even to seek redressal of his grievance from the Authorities. Even while the Authorities had not responded to the communication dated 12 April 2019 of the Petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the Government considered it expedient to provide a scheme for settlement of arrears of tax, interest, penalty or late fee under those Acts for the period ending on or before 30 June 2017, so that the settlement of such disputes would safeguard the revenue and also settle the arrears of tax. 35. In the face of such objectives of the Amnesty Scheme, the State cannot submit in its affidavit or the AGP cannot be heard to be arguing that just because of the communication dated 12 April 2019 pursuant to which the Petitioner withdrew the intimation to file an appeal in respect of the year 2010-2011 where the dues were Rs. 14,00,74,890/-, that the said amount became available for recovery from 12 April 2019. In our view, such an approach by the State clearly militates against the objectives of the Amnesty Scheme. Having said this, we do not think it is necessary for us to dwell into the rival contentions of the parties on the merits of the matter, in as much as the very action of the Respondent authorities in making the adjustment of refund due to Petitioner for the year 2011-2012 while considering the application under the Amnesty Scheme for the year 2010-2011 without notice to the P ..... X X X X Extracts X X X X X X X X Extracts X X X X
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