1971 (7) TMI 147 - HC - VAT and Sales Tax

Issues Involved
1. Refund of sales tax paid due to inter-State sales.
2. Validity of Rule 27-A prescribing a time limit for refund applications.
3. Competency of the State Government to make rules under section 39(2)(n) of the Andhra Pradesh General Sales Tax Act, 1957.
4. Whether prescribing a limitation period for refund applications is within the rule-making power.

Detailed Analysis

1. Refund of Sales Tax Paid Due to Inter-State Sales
The petitioner, a dealer in groundnuts, sought a refund of sales tax paid for the assessment years 1964-65 to 1967-68, claiming entitlement due to inter-State sales conducted in the same assessment years. The refund application was initially denied due to a time-barred filing, leading to the present writ petition for certiorari to quash the order refusing the refund.

2. Validity of Rule 27-A Prescribing a Time Limit for Refund Applications
The core contention was whether Rule 27-A, which mandates a three-month period for filing a refund application from the end of the month in which the goods were sold, is ultra vires of the proviso to section 6 of the Andhra Pradesh General Sales Tax Act, 1957. The court examined whether this rule was within the legislative competence of the State Government.

3. Competency of the State Government to Make Rules Under Section 39(2)(n)
The petitioner argued that the State Government lacked the authority to prescribe a limitation period under section 39(2)(n) of the Act, as this section pertains to regulating procedures and not prescribing limitations. The court clarified that Rule 27-A was not made under section 39(2)(n) but under the proviso to section 6 of the Act, which aligns with section 15(b) of the Central Sales Tax Act, empowering the State Government to prescribe the manner and conditions for refunds.

4. Whether Prescribing a Limitation Period for Refund Applications is Within the Rule-Making Power
The petitioner cited several cases to argue that prescribing a limitation period is beyond the scope of rule-making authority when the main Act does not specify such a period. The court noted that while prescribing a limitation period under the term "manner" might be contentious, the term "conditions" in the proviso to section 6 of the Act provides sufficient authority. The court held that the term "condition" includes prerequisites such as filing within a specified time, making Rule 27-A valid.

The court distinguished between "manner" and "conditions," emphasizing that the latter allows for the imposition of time constraints as a condition precedent for refunds. This interpretation was supported by precedents such as the Full Bench decision in Chenchuramana v. Arunachalam and the decision in Deputy Commissioner of Commercial Taxes v. Lakshmana Swamy, which upheld similar conditions as valid.

Conclusion
The court dismissed the writ petition, holding that Rule 27-A is valid and within the rule-making power conferred by the proviso to section 6 of the Andhra Pradesh General Sales Tax Act. The court also declined to exercise discretionary jurisdiction under Article 226 of the Constitution in favor of the petitioner, citing deliberate delay and potential tax evasion. The petition was dismissed with costs of Rs. 250.

Judgment
Petition dismissed.

← Previous Next →