2007 (2) TMI 597 - HC - VAT and Sales Tax

Issues Involved:
1. Legality of the assessment orders dated January 6, 1993, and December 27, 1996, for payment of tax on the sale proceeds of mustard oil.
2. Rejection of the appeal and revision petition against the assessment orders by the Deputy Commissioner of Taxes and the Additional Commissioner of Taxes.
3. Application of the Assam General Sales Tax Act, 1993, and its impact on the assessment orders.
4. Principle of "unjust enrichment" regarding the refund of taxes paid.

Issue-wise Detailed Analysis:

1. Legality of the Assessment Orders:
The petitioner challenged the assessment orders dated January 6, 1993, and December 27, 1996, for the payment of tax on mustard oil sales. The assessment order for the period ending September 30, 1992, was issued when the tax was imposed on mustard oil sales from July 30, 1992, to June 28, 1993. However, the Assam Taxation Laws (Amendment) Ordinance, 1993, exempted mustard oil from tax retrospectively from July 30, 1992. Consequently, the assessment orders dated December 27, 1996, for the periods ending March 31, 1993, and June 30, 1993, were issued when there was no law imposing tax on mustard oil sales.

2. Rejection of Appeal and Revision Petition:
The petitioner's appeal against the assessment orders was rejected by the Deputy Commissioner of Taxes on June 15, 1998, and the revision petition was dismissed by the Additional Commissioner of Taxes on October 5, 1998. The appellate authority observed that the petitioner failed to provide material evidence that taxes were not collected from customers. The burden of proof was on the petitioner to establish that no tax was charged on the sale of goods, and in the absence of such proof, the benefit of doubt went to the government.

3. Application of the Assam General Sales Tax Act, 1993:
The Assam General Sales Tax Act, 1993, repealed the Assam Sales Tax Act, 1947, and the Assam Finance (Sales Tax) Act, 1956, effective from July 1, 1993. Section 74 of the Assam General Sales Tax Act, 1993, deals with repeals and savings, allowing for the continuation of proceedings under the repealed acts. The petitioner filed the appeal against the January 6, 1993, assessment order in 1998, which was beyond the 30-day appeal period provided under the repealed act. Therefore, the assessment order dated January 6, 1993, had attained finality and could not be set aside.

4. Principle of "Unjust Enrichment":
The court applied the principle of "unjust enrichment" as laid down by the Supreme Court in Mafatlal Industries Ltd. v. Union of India and Union of India v. Raj Industries. The petitioner must prove that the tax burden was not passed on to customers to claim a refund. The assessment authority was directed to determine whether the tax paid for the periods ending March 31, 1993, and June 30, 1993, was passed on to third parties (customers). If the burden was passed on, the petitioner would not be entitled to a refund.

Conclusion:
The writ petition was allowed to the extent that the assessment orders dated December 27, 1996, for the periods ending March 31, 1993, and June 30, 1993, were set aside. The assessment authority was directed to decide whether the tax burden was passed on to customers, and if so, no refund would be granted to the petitioner. The court did not interfere with the orders dated June 15, 1998, and October 5, 1998, regarding the assessment order dated January 6, 1993. Parties were directed to bear their own costs.

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