2006 (1) TMI 556 - HC - VAT and Sales Tax

Summary

Issues Involved:

1. Refund of trade tax deposited by the petitioner.
2. Absence of specific direction for refund in the Tribunal's order.
3. Whether the petitioner deposited the tax for the relevant assessment years.
4. Application of the doctrine of unjust enrichment.

Issue-wise Detailed Analysis:

1. Refund of Trade Tax Deposited by the Petitioner:

The petitioner, a private limited company, installed bio gas plants at Kesar Sugar Works and Indian Turpentine and Rosin Company, Bareilly. The Assistant Commissioner (Assessment), Trade Tax, Bareilly, taxed the supply and installation of the bio gas plant at 10% as an unclassified item for the assessment years 1987-88, 1990-91, and 1991-92. The petitioner's appeals against these orders were initially unsuccessful but were eventually allowed by the Trade Tax Tribunal, which held that no tax was payable on the supply and installation of the bio gas plant. The petitioner sought a refund of the trade tax deposited, which was denied by the respondents on the grounds that there was no specific direction for a refund in the Tribunal's order.

2. Absence of Specific Direction for Refund in the Tribunal's Order:

The respondents argued that without a specific order directing the refund, no refund voucher could be issued. However, the court held that Section 29 of the U.P. Trade Tax Act, 1948, mandates the assessing authority to refund any excess tax paid. The court emphasized that the absence of a specific direction for a refund in the Tribunal's order does not preclude the petitioner from receiving a refund. The court cited precedents, including Modi Industries Limited v. Commissioner of Sales Tax, U.P., and Commissioner of Sales Tax, U.P. v. Auraiya Chamber of Commerce, to support the principle that excess tax paid should be refunded even without an explicit order.

3. Whether the Petitioner Deposited the Tax for the Relevant Assessment Years:

The respondents claimed that the petitioner did not deposit any tax for the assessment years 1987-88, 1990-91, and 1991-92, and that the tax was deposited for the assessment year 1992-93. The court found this claim to be unjustified, noting that the Trade Tax Officer's letter dated April 1, 2001, confirmed the petitioner had deposited Rs. 3,37,500 on August 7, 1992, and Rs. 19,700 on October 9, 1992. The court held that the petitioner was entitled to the refund of these amounts, as the deposits were made in respect of the relevant assessment years.

4. Application of the Doctrine of Unjust Enrichment:

The court referred to the principle of restitution and the doctrine of unjust enrichment, as established in Mafatlal Industries Ltd. v. Union of India. It held that the petitioner is entitled to a refund of the excess tax paid, subject to the condition that the petitioner did not pass on the tax burden to another party. The court directed that if the amounts had been credited or refunded to the Industrial Finance Corporation of India, they should not be treated as deposited on behalf of the petitioner.

Conclusion:

The court concluded that the petitioner is entitled to a refund of Rs. 3,37,500 and Rs. 19,700, along with interest at the rate of 18% per annum as per Section 29(2) of the U.P. Trade Tax Act, 1948. The respondents were directed to refund the amount within one month from the date of the court's order, failing which they would also be liable to pay interest on the interest amount. The court quashed the last paragraph of the order dated April 1, 2001, and the Tribunal's order dated August 16/21, 2001. The writ petition was allowed with no order as to costs.