2015 (5) TMI 140 - HC - VAT and Sales Tax

Denial of refund claim - Denial on the ground that some reassessment proceedings have been initiated - Held that - As per the assessment orders passed by the appropriate authority for the Financial Years 1999-00 and 2000-01, the petitioner is entitled to the refund of ₹ 9,95,749/- and ₹ 12,66,765/-. However, thereafter on the basis of the recommendation of the pre-audit department the reassessment proceedings are initiated, which are pending since 2004. No reasons whatsoever has been given for not deciding the reassessment proceedings, which are pending since 2004. Under the circumstances, to deny the refund, which the petitioner is entitled to as per the assessment orders for the Financial Years 1999-00 and 2000- 01 solely on the ground that the reassessment proceedings are pending since many years is absolutely illegal and most arbitrary. Hence, subject to the outcome of the reassessment, if at all it is permissible now, the petitioner is entitled to refund of the amount, which the petitioner is entitled to as per the assessment orders passed by the appropriate authority for the Financial Year 1999-00 and 2000-01. As such there is no delay on the part of the petitioner at all. If at all there is any delay, there is a delay on the part of the appropriate authority to decide the reassessment proceedings, which are pending since 2004. There is no reason forthcoming for not concluding the reassessment proceedings, which are pending since 2004. If that be so, it is not open for the the State to take a plea of delay. - Refund granted.

Summary

Issues:
1. Petition to quash and set aside a communication rejecting a refund request under the Gujarat Sales Tax Act for the Financial Years 1999-00 and 2000-01.
2. Validity of reassessment proceedings initiated by the Commercial Tax Officer.
3. Delay in deciding reassessment proceedings as a ground for denying the refund.

Analysis:
1. The petitioner filed a petition under Article 226 seeking to quash a communication rejecting a refund request of Rs. 9,95,749/- and Rs. 12,66,765/- under the Gujarat Sales Tax Act for the Financial Years 1999-00 and 2000-01. The petitioner argued that they were entitled to the refund as per assessment orders and that the reassessment proceedings were illegal and without jurisdiction, citing relevant legal precedents. The respondent opposed the petition, alleging delay on the petitioner's part and pending reassessment proceedings.

2. The High Court noted that the petitioner was indeed entitled to the refund as per the assessment orders, but reassessment proceedings were initiated based on a pre-audit department recommendation and had been pending since 2004. The court found no justifiable reason for the delay in deciding the reassessment proceedings. Denying the refund solely on the grounds of pending reassessment proceedings was deemed illegal and arbitrary. The court held that the petitioner should receive the refund amount subject to the outcome of the reassessment proceedings, emphasizing that any delay was on the part of the appropriate authority, not the petitioner.

3. The court addressed the contention of delay raised by the respondent, clarifying that any delay was attributable to the authorities for not concluding the reassessment proceedings since 2004. The court emphasized that the State could not use delay as a valid reason to deny relief to the petitioner. Consequently, the court directed the appropriate authority to refund the amounts due to the petitioner within one month, subject to the final decision on the reassessment proceedings. The judgment made it clear that no opinion was expressed on the merits of the reassessment proceedings. The court ruled in favor of the petitioner, making the rule absolute without any costs.