1997 (4) TMI 477 - HC - VAT and Sales Tax

Summary

Issues:
1. Refund of excess tax amount to the petitioner for the assessment year 1993-94.
2. Authority's power to withhold refund under sections 43 and 44 of the State Act.
3. Compliance with rules and obligations by the Assessing Authority.

Analysis:

Issue 1: Refund of excess tax amount
The petitioner, a registered dealer under the Haryana General Sales Tax Act and the Central Sales Tax Act, filed quarterly returns for the assessment year 1993-94. The assessment finalized by the Excise and Taxation Officer allowed a refund of Rs. 1,89,056 to the petitioner. However, the refund voucher was not sent to the petitioner along with the assessment order, leading to the filing of a petition seeking a writ of mandamus for the refund. The respondents contended that the assessment order suffered from illegalities, prompting the Joint Excise and Taxation Commissioner (Appeals) to issue a show cause notice to the petitioner regarding the alleged irregularities in the assessment order.

Issue 2: Authority's power to withhold refund
Sections 43 and 44 of the State Act govern the refund process. Section 43 mandates the refund of excess tax paid by a dealer, with the authority empowered to adjust the refund against any outstanding amount due from the dealer. Section 44 allows the authority to withhold a refund if it may adversely affect recovery, subject to the Commissioner's final decision. In this case, no order under section 44 was passed, and the mere issuance of a notice under section 40 did not entitle the respondents to withhold the refund. The obligation to refund excess tax lies with the Assessing Authority, and withholding can only occur if it may affect recovery during pending proceedings.

Issue 3: Compliance with rules and obligations
Rule 35(1)(a) of the Haryana General Sales Tax Rules mandates the Assessing Authority to determine the excess amount paid by the dealer and issue a refund voucher along with the assessment order. Failure to do so, despite repeated requests by the petitioner, led to unnecessary litigation. The court held that authorities must faithfully follow the Act and rules to avoid citizen harassment. Consequently, the court allowed the writ petition, directing the respondents to refund the amount or adjust it against any outstanding demand within one month, along with statutory interest if applicable.

In conclusion, the court's judgment focused on the petitioner's right to refund, the authority's power to withhold refunds, and the importance of compliance with statutory obligations to prevent citizen harassment.