1989 (12) TMI 317 - SC - VAT and Sales Tax

Whether this Court can direct the authorities to revise the assessment or refund the excess tax paid in this writ petition? Whether the petitioner can recover the said amount by filing a suit? Held that - Appeal allowed. In view of the facts and circumstances of the case and especially in view of the fact that in this case there is no controversy or denial by the respondents as to the date when the appellant came to know of the excess payment this appeal has to be allowed. The judgment and order of the High Court are set aside. It is declared that the appellant is entitled to the refund of the amount subject to setting off of arrears if any due from the appellant.

Summary

Issues:
1. Assessment of tax at an incorrect rate
2. Application for refund barred by limitation
3. Jurisdiction of the Court to direct revision or refund
4. Possibility of recovery through a suit
5. Appeal to the Supreme Court for refund

Analysis:

The judgment involves a case where the petitioner, a registered dealer under the Andhra Pradesh General Sales Tax Act and Central Sales Tax Act, was assessed for tax on the purchase turnover of groundnuts for the year 1974-75. Initially, tax was levied at 4-1/4 per cent, but later 1/4 per cent was deleted due to groundnuts being declared goods. The petitioner claimed to have paid excess tax due to a mistake in the tax rate calculation, as the rate was actually 3 per cent during the relevant period, not 4 per cent. The petitioner sought a refund of the excess amount paid, which was denied by the Deputy Commissioner as being time-barred due to the application filed seven years after the assessment year.

The main issue addressed was the timeliness of the petitioner's application for refund. The Deputy Commissioner rejected the application as it was filed beyond the four-year limitation period. The Court affirmed this decision, emphasizing that the application for revision should have been made within four years of the end of the relevant assessment year. The Court also deliberated on whether it could direct the authorities to revise the assessment or refund the excess tax through a writ petition. It was determined that since more than three years had passed since the petitioner discovered the alleged mistake, any suit for recovery of the excess tax would be barred by limitation, making it impossible to grant relief through the writ petition.

In the subsequent appeal to the Supreme Court, special leave was granted, and the appeal was allowed based on the undisputed date of the petitioner's knowledge of the excess payment. The Court set aside the High Court's judgment and ordered the refund of the excess amount to the appellant, subject to any arrears owed by the appellant. The appeal was disposed of with no costs awarded, providing a favorable outcome for the appellant in terms of the refund sought.

Overall, the judgment highlights the importance of adhering to limitation periods for seeking refunds or revisions in tax matters and underscores the significance of timely legal actions in such cases to avoid being barred by limitation.