1997 (10) TMI 379 - HC - VAT and Sales Tax

Summary

Issues:
Claim for refund under section 14 of the Orissa Sales Tax Act, 1947.

Analysis:
The judgment pertains to a claim for refund under section 14 of the Orissa Sales Tax Act, 1947. The petitioner had filed a refund application which was initially withheld by the Sales Tax Officer based on the Commissioner's decision under section 14-D of the Act. The key issue revolved around whether the conditions required for the operation of section 14-D had been met. The Commissioner had withheld the refund on the grounds that the grant of refund would adversely affect the revenue. However, it was contested by the petitioner that the Commissioner had not fulfilled the necessary conditions as per the Act.

The Court analyzed the provision of section 14-D, which empowers the Commissioner to withhold a refund if it is believed that granting the refund would negatively impact the revenue. The Court emphasized that the Commissioner's decision must be based on a genuine opinion, supported by grounds and material evidence. Mere filing of an appeal or the pendency of proceedings is not sufficient to withhold a refund. The opinion of the Commissioner must be formed and recorded before directing the refund to be withheld. The Court referred to previous case law to highlight the importance of a well-founded opinion by the Commissioner.

Upon examination of the records, the Court found that the Commissioner had not recorded a valid opinion justifying the withholding of the refund. The Court held that the mere reference to section 14-D without a substantiated opinion was insufficient. As a result, the impugned order withholding the refund was set aside, and the Sales Tax Officer was directed to reevaluate the refund application within six weeks. The writ application was allowed, and no costs were imposed.

In a concurring opinion, Justice S.C. Datta agreed with the decision to allow the writ application, thereby concluding the judgment in favor of the petitioner.