2009 (2) TMI 758 - HC - VAT and Sales Tax

Summary

Issues involved:
Refund of excess tax paid, finalization of assessments, withholding of refund, best judgment assessment, interest on belated refund, provisions of the Tamil Nadu General Sales Tax Act, 1959.

Analysis:
The petitioner challenged an order regarding the refund of excess tax paid, which was to be considered after finalization of assessments. The Commercial Tax Officer determined the excess tax paid by the petitioner for the year 1996-97. Despite being informed about the refund, it was not processed, leading to the petitioner filing a writ petition. The court directed the respondent to consider the representation, resulting in the issuance of impugned proceedings in November 2008.

The respondent's stand was that refund would only be considered after finalization of assessments for the years 2002-03 and 2003-04, as the petitioner had ceased business operations. The court noted that no assessment had been made by the date of the impugned order and emphasized that withholding the refund without a liability determination was not supported by the Tamil Nadu General Sales Tax Act, 1959. Section 24(4) of the Act mandates interest on belated refund of excess tax.

Considering the circumstances, the court disposed of the writ petition by directing the respondent to refund the excess tax determined earlier within four weeks if no assessment order imposing liability had been passed for the relevant years. The respondent was instructed to adhere to the Act's provisions and pay interest on the refund. The court closed the related motions without costs.