1982 (9) TMI 210 - HC - VAT and Sales Tax

Summary

Issues:
1. Assessment of sales tax for the year 1967-68.
2. Application for refund of excess amounts deposited for the years 1948-49 and 1962-63.
3. Delay in processing the refund application.
4. Claim for interest on the refund amount.

Analysis:

1. Assessment of Sales Tax for the Year 1967-68:
The petitioner, a public limited company, was initially assessed for sales tax at Rs. 37,94,875.76 for the year 1967-68. After rectification and appeals, the final tax liability was determined at Rs. 19,726.86. Subsequently, the petitioner claimed a refund of excess amounts deposited for the years 1948-49 and 1962-63, totaling Rs. 28,842.30, against the tax liability for 1967-68.

2. Application for Refund of Excess Amounts:
The petitioner applied for a refund of the excess amounts deposited for the years 1948-49 and 1962-63, adjusting them against the tax liability for 1967-68. Despite repeated reminders and delays in processing the application, no refund was initiated. The assessing authority rejected the application on a technical ground after over four years of pending status.

3. Delay in Processing the Refund Application:
The assessing authority failed to refund the amount due to the petitioner promptly, even without a formal application for refund or due to a technicality in the application. The delay was attributed to the need for approval from the Commissioner of Sales Tax for amounts exceeding Rs. 20,000, which was found to be unjustified and not supported by any legal provision.

4. Claim for Interest on the Refund Amount:
The petitioner claimed interest on the refund amount at eighteen per cent per annum from 1st November, 1978, when the relevant sub-section of section 29 came into force. The court found the claim for interest to be justified, ruling that the delay in refunding the amount, especially due to unnecessary procedural requirements, was not acceptable. The court directed the respondents to refund the principal amount along with interest and awarded costs to the petitioners.

In conclusion, the court allowed the petition, directing the respondents to refund the principal amount of Rs. 28,842.30 along with interest at eighteen per cent per annum from 1st November, 1978, until the date of payment. The petitioners were also awarded costs amounting to Rs. 500.