1985 (6) TMI 177 - HC - VAT and Sales Tax

Issues Involved:
1. Entitlement to remission and/or refund under Section 37-A of the Assam Sales Tax Act, 1947.
2. Jurisdiction and authority of the State Government and Commissioner of Taxes regarding refund.
3. Conditions and circumstances for granting refund under Section 37-A(2).
4. Necessity of framing rules for granting relief under Section 37-A(2).
5. Petitioner's legal right to claim relief under Section 37-A(2).

Detailed Analysis:

1. Entitlement to Remission and/or Refund under Section 37-A of the Assam Sales Tax Act, 1947:
The core issue is whether the petitioner is entitled to remission and/or refund under Section 37-A of the Assam Sales Tax Act, 1947. The petitioner, a dealer under the Act, paid sales tax on natural gas until August 22, 1968. The petitioner sought a refund of Rs. 62,919.05 under Section 37-A(2), which the Government denied. The court examined whether the State Government acted illegally or breached Section 37-A(2) by refusing the refund.

2. Jurisdiction and Authority of the State Government and Commissioner of Taxes Regarding Refund:
Section 37 of the Act deals with refunds, imposing a statutory obligation on the Commissioner to refund any excess sum paid by a dealer. The power of refund was exclusively within the jurisdiction of the Commissioner of Taxes, and the State Government had no jurisdiction to grant refunds under Section 37 of the Act. The term "refund" implies repayment or restoration of money, and it was agreed that the State Government could not direct refunds under this section.

3. Conditions and Circumstances for Granting Refund under Section 37-A(2):
Section 37-A(1) allows the State Government to remit tax or penalty if a registered dealer suffers heavy loss due to a natural calamity. However, this case did not fall under Section 37-A(1). Section 37-A(2) empowers the State Government to grant a drawback, set-off, or refund of tax paid on raw materials used in manufacturing goods for sale, subject to prescribed conditions and circumstances. The tax must have been paid under the Assam Sales Tax Act, 1947. Since natural gas became taxable under a different Act from April 1, 1969, the petitioner's claim for refund for the period after this date was not applicable under Section 37-A(2).

4. Necessity of Framing Rules for Granting Relief under Section 37-A(2):
The legislative intent in Section 37-A(2) is clear that the State Government should exercise the power to grant refunds in accordance with the rules. The rules must prescribe the circumstances and conditions for granting refunds. The court emphasized that the State Government could only grant relief upon framing such rules. The absence of rules meant that neither the State Government nor any authority could grant the relief sought by the petitioner.

5. Petitioner's Legal Right to Claim Relief under Section 37-A(2):
The court concluded that until the rules were framed, the petitioner had no legal right to claim relief under Section 37-A(2). The petitioner's request for the court to direct the State Government to frame the rules was declined. The court noted that it was up to the State Government to decide whether to frame the rules or delete Section 37-A(2). The petition was dismissed with costs of Rs. 200, payable to the Gauhati High Court Legal Aid Committee.

Conclusion:
The petitioner was not entitled to any relief under Section 37-A(2) of the Assam Sales Tax Act, 1947, due to the absence of rules prescribing the conditions and circumstances for granting such relief. The petition was dismissed, and the court directed the petitioner to pay the costs to the Gauhati High Court Legal Aid Committee.

← Previous Next →