2005 (8) TMI 640 - HC - VAT and Sales Tax

Summary

Issues:
Refund of appeal fee and interest thereupon under Bihar Finance Act, 1981.

Analysis:
The petitioner, a partnership firm, filed appeals against assessment orders for 1993-94 and 1994-95. The appeals were allowed by the Joint Commissioner of Commercial Taxes. The petitioner sought refund of appeal fees, alleging unjust enrichment by the Commercial Taxes Department for not processing the refund. The petitioner claimed interest on the refund amount as per provisions of sections 42 and 43 of the Bihar Finance Act, 1981. The petitioner contended that the department's withholding of the refund entitled them to interest under section 43. The petitioner cited legal precedents supporting their claim, emphasizing the entitlement to interest on delayed refunds.

The petitioner's counsel argued that the department's failure to refund the amount due warranted the payment of interest as per section 43 of the Act. Legal references were made to highlight the obligation to refund excess amounts with interest. The counsel cited judgments from the Andhra Pradesh High Court and previous decisions of the Jharkhand High Court to support the claim for interest on delayed refunds. The counsel emphasized that interest should be paid as per statutory provisions, and the department should not withhold payments rightfully due to the petitioner.

The court deliberated on the applicability of sections 42 and 43 of the Bihar Finance Act, 1981 to the case. The controversy centered on whether the appeal fee deposited by the petitioner was part of the assessed tax, thus attracting interest provisions. The court noted that the appeal fee was distinct from sales tax dues and was a prerequisite for filing the appeal. It was concluded that the appeal fee was not part of the assessed tax, thereby impacting the application of sections 42 and 43. Despite procedural lapses in applying for a refund, the court held that the department was obligated to refund the excess amount paid for filing the appeal.

The court directed the concerned authorities to pay interest at nine per cent on the refunded amounts from the date of application till the date of payment. The writ petition was disposed of with no order as to costs. Both judges, Altamas Kabir C.J. and Merathia R.K. concurred with the decision, emphasizing the petitioner's entitlement to interest on the refunded amounts as per statutory provisions.