1996 (12) TMI 362 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether an order directing refund of tax in implementation of the orders of the appellate authority can be passed after an order under section 33-C of the Andhra Pradesh General Sales Tax Act has been passed.

Analysis:
The judgment of the High Court of Andhra Pradesh dealt with a writ petition concerning the implementation of an order of the Appellate Deputy Commissioner directing a refund of tax for certain assessment years. The petitioner sought a writ of mandamus to enforce the appellate authority's order. The respondent, in response, cited a notice proposing to revise the appellate authority's order and an order under section 33-C of the Act withholding the refund of interest. The key contention was whether a refund order could be passed after the order under section 33-C. Section 33-C of the Act empowers the assessing authority to withhold refunds in certain circumstances with the approval of the Deputy Commissioner. The court clarified that the assessing authority can withhold refunds if the order giving rise to the refund is under appeal and may adversely affect revenue. In this case, the order withholding refund was issued after the approval of the Deputy Commissioner, making it a legal action. The court also opined that the time limit under rule 35 of the Andhra Pradesh General Sales Tax Rules for implementing orders is recommendatory, not mandatory. Once an order under section 33-C is passed, no refund can be granted thereafter, whether within two months or beyond. The court emphasized that while refunds should ideally be implemented within two months of the order, delays beyond this period do not render the refund illegal.

The judgment highlighted the significance of section 33-C of the Act in allowing the assessing authority to withhold refunds in specific situations where the revenue may be adversely impacted. It underscored that the authority's action in withholding refunds after obtaining approval was lawful and not arbitrary. Additionally, the court clarified that the time limit prescribed in rule 35 for implementing orders is not binding, and once an order under section 33-C is in place, refunds cannot be granted subsequently. The judgment emphasized that delays in refund implementation beyond the recommended two-month period do not invalidate the refund process, as long as the actions comply with the legal provisions of the Act.