2012 (6) TMI 764 - HC - VAT and Sales Tax

Order forfeiting the refundable amount - Whether such order amounts to revising the Commissioner s order which is impermissible in law? Held that - There is no dispute that while completing the assessment, the second respondent ordered refund on the ground that the TDS under section 5H of the Sales Tax Act was already deducted on ballast and cement and therefore, the tax already paid has to be refunded. This finding remained intact and this stood affirmed by the ADC as well as the Commissioner. Therefore, the principle in Mafatlal Industries Ltd. v. Union of India 1996 (12) TMI 50 - SUPREME COURT OF INDIA has no application. It is not a case of unjust enrichment at all. A bare perusal of section 30C(1) would support the contention of the petitioner that the power to forfeit the tax provided therein is not attracted in a case of this nature. Further, having already passed reassessment order under section 14(4) on January 17, 2000, the second respondent could not have passed the impugned order ignoring the order of the ADC and the Commissioner which are binding on him. The impugned order, therefore, is ex facie unsustainable and it is accordingly set aside. The second respondent shall refund the amount as per form C dated September 5, 2003 within a period of four weeks from the date of receipt of copy of this order along with interest as per section 33E of the Sales Tax Act. W.P. allowed.

Summary

Issues:
1. Validity of the order forfeiting the refundable amount.
2. Interpretation of section 30C(1) of the Sales Tax Act.
3. Applicability of the principle of unjust enrichment.
4. Authority of the second respondent to pass the impugned order.

Analysis:

1. Validity of the order forfeiting the refundable amount:
The case involved a dispute regarding the forfeiture of a refundable amount by the second respondent. The petitioner contended that the impugned order amounted to revising the Commissioner's order, which was impermissible. The court noted that the refundable amount had been determined through assessment and reassessment processes, and the impugned order forfeiting the refund was found to be unsustainable. The court set aside the impugned order and directed the second respondent to refund the amount within a specified time along with interest.

2. Interpretation of section 30C(1) of the Sales Tax Act:
The petitioner argued that section 30C(1) of the Sales Tax Act did not empower the forfeiture of a refund already determined. The court examined the provisions of the Act and concluded that the power to forfeit the tax provided in section 30C(1) was not applicable in the present case. The court held that the impugned order forfeiting the refundable amount was unsustainable and set it aside.

3. Applicability of the principle of unjust enrichment:
The petitioner asserted that the refundable amount should not be forfeited as it would not result in unjust enrichment. The court analyzed the factual matrix of the case and found that the refundable amount had been determined based on assessments and revisions, without any unjust enrichment to the petitioner. The court held that the principle of unjust enrichment did not apply in this scenario.

4. Authority of the second respondent to pass the impugned order:
The court considered whether the second respondent had the authority to pass the impugned order forfeiting the refundable amount. It was observed that the second respondent had already passed reassessment orders and consequential orders, and the impugned order was found to be unsustainable as it ignored the previous binding orders of the ADC and the Commissioner. The court set aside the impugned order and directed the second respondent to refund the amount as per the original form within a specified time frame.

In conclusion, the High Court of Andhra Pradesh held that the impugned order forfeiting the refundable amount was unsustainable and set it aside. The court directed the second respondent to refund the amount to the petitioner along with interest as per the Sales Tax Act provisions. The writ petition was allowed without any order as to costs.