2001 (4) TMI 891 - AT - VAT and Sales Tax

Summary

Issues:
Jurisdiction of Appellate Tribunal to stay refund order passed by assessing authority.

Analysis:
The Appellate Tribunal lacks jurisdiction to stay the operation of the refund order passed by the assessing authority. The refund was obtained through an application under section 39-A(1) of the Tamil Nadu General Sales Tax Act, 1959. The Tribunal's jurisdiction to stay the order under the same provisions of law has been removed by Act 11 of 1997. The Appellate Tribunal's order without applying guidelines declared by the Special Tribunal in a previous case goes against natural justice. The Tribunal's lack of jurisdiction to stay the refund after the issue of the refund voucher renders its order invalid.

Rule 32 of the Tamil Nadu General Sales Tax Rules, 1959 governs the refund process after an appeal or revision order. Section 24(4) of the Act mandates payment of interest if the refund is not made within 90 days. The assessing authority must give effect to the appellate or revisional order within 90 days to avoid paying penal interest to the assessee.

Section 39-A of the Act allows for amendment of assessment orders and refund of overpaid amounts. The appellate or revisional authority can stay the refund pending appeal, revision, or review. The Appellate Tribunal has the power to stay the refund until the appeal is resolved, as long as the refund has not been encashed or adjusted for tax arrears.

In the case at hand, the Appellate Tribunal had the authority to stay the refund as the refund voucher had not been encashed due to a "stop payment" order issued by the assessing authority. The Tribunal's exercise of power under section 39-A(2) was valid as it considered the balance of convenience and acted within its judicial discretion. The contention that the Tribunal lacked jurisdiction to stay the refund after the issuance of the refund voucher was dismissed. The petitions were accordingly dismissed, and the orders were to be observed and executed by all concerned.

In conclusion, the Appellate Tribunal had the jurisdiction to stay the refund pending appeal, as provided under section 39-A(2) of the Act. The Tribunal's decision was based on legal provisions and considerations of convenience, falling within its judicial discretion.