1985 (12) TMI 354 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Refund of sales tax collected for the year 1968-69.
2. Legality of withholding refund pending the disposal of tax revision case.
3. Applicability of Section 33-B and Section 33-C of the A.P. General Sales Tax Act.
4. Claim of unjust enrichment by the petitioner.

Detailed Analysis:

1. Refund of Sales Tax Collected for the Year 1968-69:

The petitioner sought a writ of mandamus for the refund of Rs. 3,80,641, which was collected as sales tax for the year 1968-69 under the A.P. General Sales Tax Act. The Commercial Tax Officer, Mahaboobnagar, assessed the petitioner on 2nd August 1973. The petitioner's appeal to the first appellate authority was rejected, but the Sales Tax Appellate Tribunal allowed the appeal on the grounds that the assessment was barred by time. Consequently, the petitioner claimed a refund of the tax paid. However, the respondents contended that the refund request was premature as the department had filed a tax revision case against the Tribunal's order, which was still pending.

2. Legality of Withholding Refund Pending the Disposal of Tax Revision Case:

The respondents argued that the petitioner's request for a refund was under consideration and would be addressed after the disposal of the tax revision case. The department cited Section 33-C of the Sales Tax Act, which empowers the department to withhold the refund if the matter is pending in court. The court noted that the tax revision case filed by the department against the Tribunal's order had been dismissed, thereby necessitating the consideration of the refund request.

3. Applicability of Section 33-B and Section 33-C of the A.P. General Sales Tax Act:

Section 33-B of the Act mandates that any amount due for a refund as a result of an order in appeal or other proceedings must be refunded without the assessee having to make a claim. Section 33-C allows the assessing authority to withhold the refund if it is prejudicial to the revenue and with the prior clearance of the Deputy Commissioner. The court found that Section 33-B entitles the assessee to a refund following the annulment of the assessment, irrespective of whether the annulment was on the grounds of limitation or merits.

4. Claim of Unjust Enrichment by the Petitioner:

The respondents argued that the petitioner had collected the sales tax from consumers and should not be entitled to a refund, as it would result in unjust enrichment. The court found no evidence or material to support the contention that the petitioner would be unjustly enriched. The court also referenced relevant case law, including *Lakshminarayana v. Commercial Tax Officer* and *State of Rajasthan v. Ghasilal*, to support the conclusion that the petitioner is entitled to a refund when the assessment is annulled.

Conclusion:

The court directed the respondents to refund Rs. 1,96,439.11 to the petitioner within one month from the date of receipt of the order. The writ petition was partly allowed, and no costs were imposed. The court emphasized that Section 33-B applies to all situations where the assessment is annulled, and the reason for setting aside the assessment is not relevant to the claim for a refund.