2005 (4) TMI 553 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Review of the judgment and order dated February 27, 2003.
2. Refund of sales tax paid with returns.
3. Validity of assessment orders and extension orders.
4. Applicability of unjust enrichment principle.
5. Limitation period for assessment for the year 1990-91.

Issue-wise Detailed Analysis:

1. Review of the Judgment and Order Dated February 27, 2003:
The Sales Tax Officer filed review applications seeking to review the judgment and order delivered by the Court on February 27, 2003, in Special Civil Application No. 3891-93 of 1997. The original judgment quashed the assessment orders passed by the Sales Tax Officer and directed the refund of sales tax paid with returns along with interest at 12% from the date of payment till the date of refund. The review was sought on the grounds of error apparent on the face of the record.

2. Refund of Sales Tax Paid with Returns:
The Revenue contended that there was no challenge before the court about the tax paid with the returns, and every dealer is obligated under sections 40 and 47 of the Gujarat Sales Tax Act to make payment with the return. The court observed that the directions requiring the Sales Tax authority to refund the sales tax paid with the returns were erroneous and contrary to well-settled principles. The court modified the directions to refund only the sales tax paid after filing of the return and pursuant to the assessment orders.

3. Validity of Assessment Orders and Extension Orders:
The original petitioner challenged the assessment orders on the ground that the Deputy Commissioner of Sales Tax extended the time for making assessments without justifiable cause. The Supreme Court in Fag Precision Bearings v. Sales Tax Officer reversed the High Court's decision, quashing the assessment orders and directing the refund of amounts collected as sales tax. The court held that the extension orders were invalid, and thus, the assessment orders based on these extensions were also invalid.

4. Applicability of Unjust Enrichment Principle:
The Revenue raised the issue of unjust enrichment in the review applications. However, the court noted that this contention was not raised during the original proceedings or in the affidavit-in-reply. Consequently, the court did not consider the principle of unjust enrichment in the review applications.

5. Limitation Period for Assessment for the Year 1990-91:
The Revenue contended that the assessment proceedings for the period 1990-91 were not time-barred due to an amendment in section 42 of the Gujarat Sales Tax Act. However, the court rejected this contention, noting that the issue of limitation was not raised during the original proceedings. The court emphasized that the extension orders were deemed necessary by the Revenue, indicating that the limitation period was applicable. Therefore, the court held that the assessment orders for 1990-91 were invalid due to the invalid extension orders.

Conclusion:
The applications for review were partly allowed. The court modified the directions regarding the refund of sales tax, specifying that only the tax paid pursuant to assessment orders should be refunded along with interest. The contention regarding the limitation period for 1990-91 was rejected, and the principle of unjust enrichment was not considered. The Sales Tax Officer was directed to refund the sales tax paid after filing of returns for the years 1989-90 and 1990-91 within three weeks from the date of the order.