2015 (4) TMI 900 - HC - VAT and Sales Tax

Denial of refund claim - Rejection on ground that petitioner failed to produce certain evidences, including chalan, cheque number/date as also contract agreement, purchase invoice and expenses made on labour and other expenses - Held that - It is difficult to support any such action of the Deputy Commissioner, Commercial Taxes. Once the petitioners have produced the certificate for deduction of tax at source in Form C-II before him, it is not for the petitioners to produce any evidence regarding the deposit of any such tax deducted, rather if they are required to be verified they had to be verified by the authorities of the Commercial Taxes department from the Railways. Irrespective of whether the deposits had been made or not, once the tax had been deducted at source in terms of Rule 29 (6), the same had to be treated as payment of tax on behalf of the petitioners and credit had to be given for such deposits on the mere production of Form C-II and the only thing that could have been verified by the Department regarding the same would be regarding their genuineness and that they were not forged documents. Petitioners have admittedly not filed their applications before the Joint Commissioner. In the said circumstances, the entire proceedings before the Deputy Commissioner, including the order dated 29.12.2014 passed by him are without jurisdiction. The same are, accordingly, quashed. - Decided in favour of assessee.

Summary

Issues:
Seeking refund of excess payments and credit for tax deductions; Jurisdiction of authorities for refund applications.

Analysis:
The judgment deals with writ applications filed to obtain directions for refunding excess payments or allowing credit for amounts deducted as tax at source. The petitioner sought refunds for financial years 2006-07, 2007-08, and 2008-09, totaling specific amounts for each year. The Deputy Commissioner of Commercial Taxes, Biharsharif Circle, rejected the refund applications on the grounds of lack of evidence, despite the assessments for the years being time-barred.

The Court criticized the Deputy Commissioner's actions, stating that once the petitioners provided the C-II Certificate for tax deductions, they were not required to prove the deposit of the deducted tax. Verification of such deposits should have been done by the Commercial Taxes department from the Railways. The judgment emphasized that once tax was deducted at source, it should be considered as payment on behalf of the petitioners, and credit should be given upon producing the Form C-II.

Regarding the jurisdiction for refund applications, Rule 43 of the Bihar Value Added Tax, 2005 stipulates that if the refund amount exceeds Rs. 50,000, the application must be made before the Joint Commissioner. Since the petitioners did not file their applications before the Joint Commissioner, the proceedings before the Deputy Commissioner were deemed without jurisdiction. Consequently, the order passed by the Deputy Commissioner was quashed.

As a remedy, the Deputy Commissioner was directed to return the applications and documents to the petitioners, who were instructed to file them before the Joint Commissioner for further consideration. The Joint Commissioner, being the prescribed authority, was mandated to review the claims and dispose of them within two months from the submission of the applications.

In conclusion, the writ applications were disposed of with the above directions and observations, highlighting the importance of proper jurisdiction and procedural compliance in matters of tax refunds and credits.