2014 (2) TMI 1342 - HC - VAT and Sales Tax

Refund of the amount deducted as sales tax - Despite repeated demand of the petitioner, the respondents have failed to refund the amount - Mr. S. Chakraborty, learned Addl. G.A., has put in appearance on behalf of the respondents and submits that he has been instructed to state that the Commissioner of Taxes & Excise has written a letter to the Food Corporation of India (FCI) asking them to inform as to what amount was deducted from the bills of the petitioner in connection with the work order. We are not at all happy with this state of affairs. Held that - The department maintains records assessee-wise also as to how taxes have been deposited and if the department looks into its own records, it can easily find out what is the amount of tax deducted by the FCI and deposited into the accounts of the petitioner. The respondents are just trying to shift the burden to the FCI and to the petitioner and not shouldering their own responsibility. At the request of Mr. Chakraborty, learned Addl. G.A., we give last opportunity of three weeks to refund the entire amount along with statutory interest as payable from time to time up to 25-05-2008.

Summary

Issues: Non-compliance with court orders regarding refund of sales tax amount.

Analysis:
The judgment reflects the State of Tripura's failure to comply with court orders for refunding a sales tax amount despite multiple directives. The case originated from a judgment delivered by a learned Single Judge of the Agartala Bench of the Gauhati High Court on 06-08-2001, setting aside the decision to levy 4% sales tax. The State of Tripura appealed against this judgment, and the Division Bench disposed of the matters on 28-08-2007, a decision upheld by the Apex Court on 25-02-2008. However, the sales tax amount was not refunded to the petitioner. Subsequently, on 26-06-2009, the petitioner requested a refund, which was ignored by the respondents. In response to a writ petition filed by the petitioner, the court issued notice to the respondents on 21-01-2014. The Commissioner of Taxes & Excise's delay in taking action was criticized, as the department had a duty to identify the tax amount paid by the petitioner and refund it promptly. The court expressed dissatisfaction with the department's attempt to shift responsibility to the Food Corporation of India (FCI) and the petitioner. Consequently, the court granted a final three-week opportunity for the refund of the entire amount, including statutory interest up to 25-05-2008, with a subsequent interest rate of 12% per annum if the payment was not made by 11-03-2014. Failure to comply would result in the Commissioner of Taxes & Excise appearing before the court, with a warning of potential contempt action if orders continued to be disregarded. The case was listed for further proceedings on 11-03-2014, with a copy of the order provided to the petitioner's counsel for reference.