2001 (6) TMI 810 - HC - VAT and Sales Tax

Summary

Issues:
Refund of excess tax with interest under APGST Act.

Analysis:
The petitioner, a Government of India Undertaking, was assessed to sales tax under the Andhra Pradesh General Sales Tax Act, 1957 for executing contracts of erecting steel structurals. The Appellate Deputy Commissioner remanded the case, rejecting the contention that items used in works contract constitute second sales. The Sales Tax Appellate Tribunal upheld the petitioner's contention, directing the assessing authority to finalize assessment accordingly. The respondent failed to credit certain payments made by the petitioner, resulting in a demand for refund. After representations, the respondent passed orders giving due credit of taxes paid by the petitioner and determined the refund due. The petitioner filed a writ petition seeking a mandamus to refund the amounts due for the assessment years 1986-87 and 1987-88. The respondent filed a counter affidavit opposing the relief, but the learned Special Government Pleader for Taxes did not press the untenable defense taken in the affidavit.

The Court referred to Section 33-B and sub-section (1) of Section 33-F of the APGST Act, which provide for the refund of amounts due to the assessee and payment of interest by the State Government if the refund is not granted within a specified period. The Court noted that the respondent did not refund the excess tax within the required period, making it imperative to pay interest at the rate of 12% per annum from the date following the expiry of the specified period. The respondent's defense of seeking 'no objection' from the Deputy Commissioner was deemed untenable, as there was no legal obligation for such approval. The Court held that the petitioner was entitled to the refund and interest as per the Act.

In conclusion, the Court allowed the writ petition, directing the respondent to refund the excess tax collected from the petitioner within one month with interest calculated at 12% per annum from a specified date. The petitioner was awarded costs, payable within two weeks, with the option for the State to recover the cost from the respondent's salary.

This judgment highlights the importance of timely refund of excess tax to the assessee under the APGST Act, emphasizing the entitlement to interest if the refund is delayed beyond the specified period. The Court clarified that seeking unnecessary approvals cannot be a valid ground for withholding the refund rightfully due to the petitioner.