2013 (12) TMI 213 - HC - VAT and Sales Tax

Interest u/s 24 (4) of the Tamil Nadu General Sales Tax Act - Rejection of issuance of refund vouchers Held that - The Certificate was issued with respect to the application made for settlement of interest - The refund was ordered on 03.10.2008 even before the Ordinance was published - The Certificate would cover only the claims relating to any amount quoted in order determining the amount to be paid under the Scheme - The bar emphasised under Sections 9 and 10 shall be applicable only if the dealer wants to claim refund of the amount paid under the Samadhan Scheme and not the refund which was ordered even before the application for Settlement - there was no request for interest earlier, the single Judge had rightly disallowed the claim of interest granting liberty to the respondent and directed the appellants to issue refund voucher - there is no infirmity in the order passed by the single Judge decided against Petitioner.

Summary

Issues:
1. Refund voucher issuance and interest under Section 24(4) of the Tamil Nadu General Sales Tax Act.
2. Bar under Section 9 and Section 10 of the Settlement of Arrears Act.
3. Application for settlement under the Samadhan Scheme affecting the right of refund.

Analysis:
1. The Writ Appeal was filed against the order rejecting the demand for a refund voucher and interest under Section 24(4) of the Tamil Nadu General Sales Tax Act. The single Judge partially allowed the petition, directing the issuance of the refund voucher. The respondent had made excess tax payments and was found eligible for a refund, which was confirmed by Form 'C' issued on 03.10.2008. The respondent sought interest and approached the court, arguing that the Samadhan Scheme settlement for interest did not affect the refund claim. The single Judge allowed the refund but denied interest, leaving the option open for the respondent to pursue further remedies.

2. The appellants contended that Section 9 and Section 10 of the Settlement of Arrears Act barred all claims once settlement was opted under the Samadhan Scheme. They argued that the respondent, having chosen the scheme, was not entitled to a refund. The respondent's counsel countered that the single Judge's decision on the refund was correct but should have automatically allowed the interest claim under Section 24(4) of the Act. The court criticized the appellants for negligence in handling the refund process, causing financial loss to the state.

3. The court examined the provisions of the Settlement of Arrears Act and concluded that the respondent's application for settlement under the Samadhan Scheme was solely for interest, not affecting the pre-existing refund claim. The court highlighted that the bar under Sections 9 and 10 applied only to claims arising after opting for settlement under the scheme, not to refunds ordered before the scheme's application. As the refund was granted before the scheme's implementation and without any prior interest claim, the court upheld the single Judge's decision to allow the refund but deny interest, giving the respondent liberty to pursue the interest claim separately. The court affirmed the single Judge's order and dismissed the Writ Appeal without costs.