2009 (3) TMI 927 - HC - VAT and Sales Tax

Refund claim - Held that - The instructions dated November 20 2008 stating that the refund has been made to the petitioner and the Chief Secretary had a meeting with Financial Commissioner Excise and Taxation for evolving a mechanism and March 19 2009 (R1 and R2 respectively) clearing the refund orders from the treasuries within 48 hours without awaiting instructions from headquarter issued by the respondent-State would produce desirable result implementing the provisions of the 1948 Act and the Punjab Value Added Tax Act 2005 in their letter and spirit which would pave the way for amicable relationship between the entrepreneurs and the establishment. The respondent-State shall remain bound by all the affidavits and instructions. The writ petition stands disposed of.

Issues:
1. Refund of deposited amount under Article 226 of the Constitution.
2. Claim for interest under Section 12(3) of the Punjab General Sales Tax Act, 1948.
3. Delay in refund and failure to pay interest as per statutory provisions.
4. Dereliction of duties by Excise and Taxation Commissioner and Assistant Excise and Taxation Commissioner.
5. Accountability and responsibility for abuse of power.
6. Direction to Chief Secretary, Punjab for taking appropriate action.

Analysis:
1. The petitioner filed a petition seeking a direction for the refund of an amount deposited for the release of goods. The Tribunal accepted the appeal, and the petitioner requested interest under Section 12(3) of the 1948 Act from the date of the Tribunal's order. The consignment was detained, and a penalty was imposed, which was later set aside by the Tribunal.

2. Despite several reminders and delays, the refund was not processed until the writ petition was filed. The court noted that the refund was eventually made without interest, contrary to the statutory requirement of payment of interest if the refund exceeded ninety days. The Division Bench criticized the delay in refund and highlighted the failure of the Excise and Taxation Commissioner and Assistant Excise and Taxation Commissioner in performing their duties.

3. The court emphasized the importance of accountability and responsibility in cases of delayed refunds, citing instances of refunds given after long periods without interest. The Division Bench directed the Chief Secretary, Punjab, to take appropriate action against responsible individuals and submit a report to the court.

4. Affidavits were filed by the Chief Secretary detailing progress in refund processing and measures to streamline the system. The court acknowledged the efforts made by the Department to improve the refund process and ensure compliance with statutory provisions. The court disposed of the writ petition, emphasizing the need for adherence to the law and efficient refund mechanisms to maintain a positive relationship between entrepreneurs and the government.

By implementing the instructions issued by the respondent-State, the court expected a positive outcome in enforcing the relevant Acts and fostering a cooperative environment between businesses and the government. The court emphasized the importance of following statutory provisions, holding officials accountable for delays, and ensuring prompt refund processing to maintain transparency and efficiency in tax matters.

← Previous Next →