2000 (7) TMI 937 - HC - VAT and Sales Tax

Summary

Issues:
1. Refund of penalty amount along with interest withheld by respondents.
2. Interpretation of Sections 43 and 44 of the Haryana General Sales Tax Act and Rule 35(1)(a) of the Haryana General Sales Tax Rules.
3. Legality of withholding refund based on a reference made to revise the order of the Appellate Authority.

Detailed Analysis:
1. The petitioner sought a refund of Rs. 46,000 along with interest, which was initially imposed as penalties but later reversed by the Joint Excise and Taxation Commissioner. The respondents, however, withheld the refund based on a reference made to the Excise and Taxation Commissioner for revision of the Appellate Authority's order. The petitioner challenged this decision, arguing that mere forwarding of the case for revision does not justify withholding the refund of the penalty amount deposited under section 39(5) of the Act.

2. The court analyzed Sections 43 and 44 of the Act along with Rule 35(1)(a) of the Rules. Section 43 deals with refunds of excess tax, penalty, or interest paid by a dealer, outlining the procedure for refund either through a voucher or adjustment against any other dues. Section 44 empowers the Assessing Authority to withhold refunds if the order is under appeal or likely to affect recovery adversely. Rule 35(1)(a) specifies the process for determining excess amounts paid by the dealer and issuing refund orders accordingly.

3. The court found that the respondents failed to demonstrate any legal basis for withholding the refund, as no order under section 44 was produced to justify their actions. Merely referring the matter for revision did not authorize the withholding of the refund. Citing a previous case law, the court emphasized that such references do not automatically entitle authorities to withhold refunds. Consequently, the court allowed the writ petition, directing the respondents to refund the penalty amount with interest at 12% per annum, calculated from the date of the appellate order reversal till the actual payment date. The respondents were also given the option to adjust the refunded amount against any outstanding demands within a specified timeframe.