2015 (5) TMI 945 - HC - VAT and Sales Tax

Claim of interest on refund with refund - Refund not granted inspite of order of High Court - Levy of sales tax turnover - shame transactions for obtaining loan from bank - Held that - From a cursory reading of Rule 34, it is evident that the said rule mandates that the assessing authority shall give effect to the order of the High Court (Special Tribunal) within three months from the date of communication of the order. It is clear from the above provisions that there appears to be no other option except to comply with the order of the High Court (Special Tribunal), except where the order in issue is challenged in a higher forum and the order has been stayed. - Supreme Court in SCBA - Vs - B.D. Kaushik (2012 (9) TMI 560 - SUPREME COURT), while considering the scope of the Court to entertain miscellaneous petitions after delivery of judgment in the main petition, held that to do complete and substantial justice to the parties in the proceedings, when the miscellaneous petition filed is curative in nature and not used for supplanting substantive law, in exercise of inherent powers, shall entertain such petitions for implementing the orders of the Court. Power of the Court does not end with the passing of the order, but more so, in seeing that the order is implemented in letter and spirit, howsoever difficult it may be. In case where the orders passed by the Court are not implemented, the Court, in exercise of the inherent powers, should see to it that the orders passed by the Court are implemented. - Insofar as the interest for the delayed payment is concerned, Rule 34 mandates that the assessing authority shall refund without interest within three months from the date of communication of the order, any excess tax found to have been collected. A reading of Rule 34 makes it abundantly clear that beyond the period of three months from the date of communication of the authorisation (order of the High Court), any delay in refund of excess tax is liable to attract interest and the department is bound to pay the same. In the present case, inspite of the order being despatched by this Court on 15.4.2014, almost a year having passed, the department has not refunded the amount back to the petitioner. Therefore, invoking Rule 34, the petitioner is entitled to interest on delayed payment beyond the period of three months from the date of communication of the order. Therefore, this Court is of the considered view that the department is liable to pay interest on the amount deposited by the petitioner pursuant to the order of this Court dated 3.8.2010, as provided under Rule 34 of the Rules. - Decided in favour of assessee.

Issues Involved:
1. Refund of deposit with interest.
2. Compliance with High Court orders.
3. Jurisdiction and inherent powers of the Court.
4. Implementation of Section 38(4)(a) of the Tamil Nadu General Sales Tax Act and Rule 34 of the Tamil Nadu General Sales Tax Rules.
5. Interest on delayed refund.

Detailed Analysis:

1. Refund of Deposit with Interest:
The petitioner sought a direction for the respondents/department to refund Rs. 1,50,00,000/- along with interest, following the High Court's order dated 21.03.2014, which allowed the tax case revisions and set aside the Sales Tax Appellate Tribunal's order. The petitioner had complied with an earlier order dated 03.08.2010 to deposit the amount as a condition for stay.

2. Compliance with High Court Orders:
The petitioner filed for a refund on 29.05.2014, but the department responded that they had not received the High Court's order. Subsequent reminders by the petitioner were ignored, leading to the filing of a writ petition, which was dismissed with direction to approach the Division Bench. The Division Bench upheld the dismissal, emphasizing the need to file a separate application in the tax case revision.

3. Jurisdiction and Inherent Powers of the Court:
The Court entertained doubts about its jurisdiction to hear a miscellaneous petition post-disposal of the tax case revisions. However, the petitioner argued that under Section 151 of the Code of Civil Procedure, the Court could exercise its inherent powers to ensure compliance with its orders. The Supreme Court in SCBA vs. B.D. Kaushik (2012) and Jet Ply Wood (P) Ltd. vs. Madhukar Nowlakha (2006) supported the view that the Court's power extends to ensuring the implementation of its orders.

4. Implementation of Section 38(4)(a) of the Tamil Nadu General Sales Tax Act and Rule 34 of the Tamil Nadu General Sales Tax Rules:
Section 38(4)(a) mandates that the High Court, after hearing the parties, shall pass an order either reversing, affirming, or amending the order in question. Rule 34 requires the assessing authority to implement the High Court's order within three months of communication. The Court noted that the department had not filed an appeal against the High Court's order, and thus, was obligated to comply by refunding the amount.

5. Interest on Delayed Refund:
Rule 34 stipulates that if a refund is not processed within three months from the date of communication of the order, the department must pay interest on the delayed amount. The Court found that despite the order being dispatched on 15.04.2014, the refund had not been processed, entitling the petitioner to interest for the delay.

Conclusion:
The miscellaneous petition was allowed, directing the respondents/department to refund Rs. 1,50,00,000/- along with interest as per Rule 34 of the Tamil Nadu General Sales Tax Rules. The Court emphasized its inherent powers under Section 151 of the Code of Civil Procedure to ensure compliance with its orders, thereby doing complete justice. There was no order as to costs.

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