1999 (8) TMI 939 - HC - VAT and Sales Tax

Summary

Issues:
Claim of refund of sales tax on alcohol and export pass fee under U.P. Trade Tax Act, 1948.

Analysis:
The revision petition involved a dispute over the dealer's claim for a refund of Rs. 13,23,069.54 in sales tax on alcohol and export pass fee. The dealer had initially deposited these amounts as tax under the U.P. Sales Tax Act, realizing later that no tax was leviable. The assessing officer rejected the refund claim citing section 29-A of the Act, stating that the dealer had no right to self-allow adjustments. The Deputy Commissioner and Tribunal also dismissed the appeal. The revenue relied on sub-sections (2) and (3) of section 29-A, arguing that refunds could only be made to the persons from whom the dealer had charged tax and deposited to the Government.

The dealer contended that at the time of realization and subsequent refund through credit notes, no refund procedure was prescribed. Citing Kores (India) Ltd. v. State of Uttar Pradesh, the dealer argued that in the absence of a refund procedure, the amounts were bona fide refunded to customers and thus eligible for a refund from the State. The Court emphasized that the absence of a prescribed procedure did not mean the dealer could claim a refund if not legally liable to pay, but upheld the view that the dealer, having refunded amounts to customers, could claim a refund due to lack of prescribed procedure.

The Court referred to previous judgments like O.D. Industries v. State of U.P. and Agarwal Enterprises v. Trade Tax Officer, supporting the view that refunds could be claimed in the absence of a prescribed refund procedure. It distinguished Mahavir Machinery Corporation v. State of Uttar Pradesh, emphasizing the unique circumstances of each case. The Court also highlighted the doctrine of unjust enrichment in Mafatlal Industries Ltd. v. Union of India, underscoring the need to prove burden non-transfer for refund eligibility.

Ultimately, the Court allowed the revision petition, directing the assessing officer to refund the disputed amounts to the dealer. The decision was based on the dealer's legitimate refund actions, absence of a prescribed refund procedure, and previous court rulings supporting refund claims in similar circumstances.

This detailed analysis of the judgment showcases the legal intricacies involved in the claim for a refund of sales tax and export pass fee under the U.P. Trade Tax Act, 1948, providing a comprehensive overview of the case and the Court's reasoning behind the decision.