1997 (4) TMI 514 - HC - VAT and Sales Tax

Summary

Issues:
1. Refund of tax wrongly realized by the petitioner from respondent No. 3.
2. Interpretation of Section 29-A of the U. P. Trade Tax Act regarding the refund process.
3. Determining whether the petitioner can be considered an agent of respondent No. 3 for the purpose of refund.

Detailed Analysis:
The petitioner, a gas stove seller, sought to quash an order refusing a refund of tax realized from Vayu Sena Gas Agency. Initially, the petitioner collected tax from the agency, assuming taxability. Upon clarification that sales to the agency were not taxable, the petitioner refunded the amount to the agency for the assessment year 1983-84. Subsequently, the petitioner requested a refund from the assessing officer, which was denied citing Section 29-A(3) of the Act, allowing refunds only to the person from whom the dealer realized the amount. The agency, in a letter, requested the assessing officer to refund the amount to the petitioner, acknowledging the wrongful realization and subsequent refund by the petitioner. The court noted that the agency did not contest the petitioner's claims, indicating the agency's acknowledgment of the refund situation.

The court deliberated on whether the petitioner could be considered an agent of the agency for the refund. The department argued that the amount was held in trust for the agency and could be refunded upon its request. As the agency had already received the refunded amount from the petitioner, the agency was unlikely to apply for a refund. The court opined that the petitioner, acting on behalf of the agency as per the agency's request, should be considered an agent, not an "other person" under Section 29-A(3). This interpretation was supported by the agency's letter requesting the refund to the petitioner on its behalf.

The court emphasized a justice-oriented approach, stating that refunding to the petitioner as the agency's agent would prevent double claims by the agency. Section 29-A(3) aimed to ensure rightful refund recipients and prevent undue enrichment. By refunding to the petitioner as the agency's agent, the court concluded that the agency would effectively receive the refund, aligning with the Act's objectives. Consequently, the court allowed the petition, directing the assessing officer to refund the tax amount wrongly realized by the petitioner to the petitioner within two months, considering the petitioner's role as the agency's agent in the refund process.