2005 (8) TMI 624 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Proper authority for the grant of refund under section 38(6) of the Bombay Sales Tax Act, 1959.
2. Commencement of the period of limitation for filing a refund application.
3. Justification of the Assistant Commissioner in rejecting the refund application instead of forwarding it to the competent authority.

Issue-Wise Detailed Analysis:

1. Proper Authority for the Grant of Refund:
The Tribunal held that the Deputy Commissioner of Sales Tax (Appeals) I, Bombay, who had passed the forfeiture order, was the proper authority for the purpose of granting a refund. The applicants contended that the Assistant Commissioner should have forwarded their refund applications to the appropriate authority instead of rejecting them. The Court noted that section 38(6) of the BST Act requires the refund application to be made in writing in the prescribed form to the Commissioner. The prescribed form (Form 35-B) directs the application to the Sales Tax Officer (S.T.O.). The Court reconciled these provisions, concluding that the legislative intent was for the refund application to be first moved to the S.T.O., who would then forward it to the Commissioner. The Commissioner would conduct the necessary inquiry and pass an order, which would then be communicated back to the S.T.O. for further action. Thus, the Assistant Commissioner was not justified in rejecting the applications. The proper procedure should involve the S.T.O. forwarding the application to the Commissioner. The Court answered this issue in favor of the applicants.

2. Commencement of the Period of Limitation:
The Court addressed whether the period of one year for filing a refund application starts from the date of the forfeiture order or from the date of its communication. The applicants argued that the limitation period should begin from the date of communication to avoid hardship. The Court referred to the Supreme Court's decision in D. Saibaba v. Bar Council of India, which held that the limitation period starts from the date of communication or knowledge of the order. The Court also cited Raja Harish Chandra Raj Singh v. Deputy Land Acquisition Officer, where it was held that the date of the award includes the communication of the award to the affected party. Therefore, the Court concluded that the limitation period for filing a refund application under section 38(6) starts from the date of communication or knowledge of the forfeiture order. This issue was also answered in favor of the applicants.

3. Justification of the Assistant Commissioner in Rejecting the Refund Application:
The applicants argued that the Assistant Commissioner should have forwarded their refund applications to the competent authority instead of rejecting them. The Court agreed, stating that if the Assistant Commissioner felt he had no jurisdiction, he should have forwarded the application to the S.T.O. with whom the applicants were registered. The S.T.O. would then process the application as per the procedure outlined. The Court emphasized that the Assistant Commissioner had no authority to reject the application if he was not empowered to grant the refund. This issue was answered in favor of the applicants.

Conclusion:
The Court concluded that the proper procedure for refund applications under section 38(6) involves initially submitting the application to the S.T.O., who then forwards it to the Commissioner for inquiry and decision. The limitation period for filing such applications starts from the date of communication or knowledge of the forfeiture order. The Assistant Commissioner was not justified in rejecting the refund applications and should have forwarded them to the competent authority. The references were answered in favor of the applicants, and the Tribunal's judgment was set aside.