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1988 (8) TMI 387 - HC - VAT and Sales Tax
Issues:
Refund of tax paid on disputed turnover, entitlement to interest on delayed refund, adjustment of refund towards future tax liabilities. Analysis: The writ petition was filed under article 226 of the Constitution of India seeking a mandamus for the refund of tax paid on the disputed turnover with interest. The petitioner was assessed to tax on turnover related to liquor and beer, which were treated as sales and taxed accordingly. However, on appeal, it was held that these turnovers were mere transfers and not sales, leading to the setting aside of the tax levy. Despite the appellate order in favor of the petitioner, the refund was not processed promptly by the tax authorities. The petitioner, upon not receiving the refund, requested the Commercial Tax Officer for immediate refund or adjustment towards future tax payments. The officer, in response, refused the refund citing inability to revise the assessment order. The court noted that the officer's decision was not supported by the State and directed the refund of the amount in question by adjusting it towards the payment of monthly tax for the subsequent year. The judgment referred to Section 33-F(1) of the Andhra Pradesh General Sales Tax Act, 1957, which mandates the payment of simple interest at 12% per annum if a refund is due to the assessee and not granted within six months from the date of the appellate order. In this case, the petitioner was entitled to the refund along with interest since the six-month period had lapsed without the refund being processed. As the petitioner opted for adjustment of the refund towards future tax liabilities, the interest was to be paid until the entire refund amount was discharged. Consequently, the court allowed the writ petition, granting the petitioner the refund along with interest and costs of the proceedings. The decision highlighted the importance of timely processing of refunds and adherence to statutory provisions regarding interest payments on delayed refunds.
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