1967 (7) TMI 123 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of sections 20 and 22 of the Mysore Sales Tax Act, 1957 before amendment by Mysore Act No. 9 of 1964.
Appealability of orders relating to assessment and refund under the Act.

Analysis:
The judgment concerns two revision petitions under section 23 of the Mysore Sales Tax Act, 1957, involving the interpretation of sections 20 and 22 before their amendment by Mysore Act No. 9 of 1964. The petitioner sought a refund under the first proviso to section 5(4) of the Act for sales of declared goods subsequently sold in the course of inter-State trade. The Commercial Tax Officer refused the refunds, leading to appeals to the Deputy Commissioner under section 20 and further to the Sales Tax Appellate Tribunal under section 22. The Tribunal dismissed the appeals, stating that no appeal lies for refund under the law then in force. The crux of the issue was whether the orders by the Deputy Commissioner relating to the refund constituted orders "relating to assessment" under the Act.

The Tribunal's basis for declining to hear the appeals was that an appeal could only be preferred from an order relating to assessment passed by the Deputy Commissioner under section 22. The Tribunal held that assessment does not include refund, hence no appeal lies for refund under the law then in force. The Court delved into the provisions of sections 20 and 22 before amendment to determine the appealability of orders related to assessment and refund. It was highlighted that an appeal to the Appellate Tribunal under section 22 should be from an order "relating to assessment" passed by the Deputy Commissioner.

The Court analyzed the statutory framework, emphasizing that a refund claim under the proviso to section 5(4) is part of the assessment proceeding. The judgment elucidated that when a refund is allowed, the assessment stands altered, and the modified assessment becomes the real assessment under section 12. The Court observed that the legislative intent was to provide for an appeal even from an order refusing a refund. The judgment referenced a similar view taken by the High Court of Madras in a previous case. It concluded that the Sales Tax Appellate Tribunal erred in deeming the appeals incompetent and set aside the Tribunal's orders, remitting the appeals for proper disposal.

The Court addressed the timing of the refund refusal by the Commercial Tax Officer and emphasized that the Deputy Commissioner's order discussing the refund claim constituted an order "relating to assessment." The judgment clarified that if the applications for refund are still pending, the Tribunal should direct the Commercial Tax Officer to consider and dispose of them accordingly. The Court allowed the petitions, remanding the cases for rehearing by the Tribunal and awarded costs to the petitioner limited to the court fees paid on the revision petitions, without any direction for Advocate's fee.