2017 (7) TMI 1295 - HC - VAT and Sales Tax

Reimbursement of the excess tax paid - Intra-state sale - Section 15(b) of the CST Act - HELD THAT - This petitioner is entitled to reimbursement of amount equal to State Sales Tax paid upon purchase of coal which is at ₹ 17,89,412/and for such type of refund application, excess demand notice is not required to be annexed. The respondents are directed to reimburse the State Sales Tax paid by this petitioner towards purchase of coal which is at ₹ 17,89,412/as per order at Annexure6 to the memo of this writ petition, with statutory rate of interest within a period of eight weeks from the date of receipt of a copy of the order of this Court. Petition disposed off.

Summary

Issues:
Reimbursement of excess tax paid under Section 15 of the Central Sales Tax Act for intraState sale of coal and interState sale of coke.

Analysis:
The petitioner sought reimbursement of excess tax paid under the Central Sales Tax Act for the intraState sale of coal and interState sale of coke. The petitioner purchased coal from Jharkhand, paying State Sales Tax amounting to ?17,89,412.38, which was later converted into coke and sold outside the state, attracting Central Sales Tax of ?63,80,572.73. The petitioner argued that as per Section 15(b) of the CST Act, the tax paid on coal should have been reimbursed when the end product, coke, was sold as an interState sale. The respondents contended that the refund application was improper as it lacked the excess demand notice required by the Bihar Sales Tax Rules.

The court examined the facts and found that the petitioner had indeed paid State Sales Tax on coal and Central Sales Tax on the sale of coke. Referring to Section 15(b) of the CST Act, the court concluded that the petitioner was entitled to reimbursement of the State Sales Tax paid on coal. The court noted that the refund application was in compliance with Form XXIII and Rule 35 of the Bihar Sales Tax Rules, 1983. Despite the respondent's argument regarding the absence of the excess demand notice, the court held that the petitioner should be reimbursed the State Sales Tax amount of ?17,89,412 without the need for the excess demand notice.

Therefore, the court directed the respondents to reimburse the State Sales Tax paid by the petitioner for the purchase of coal, amounting to ?17,89,412, along with statutory interest within eight weeks. Consequently, the writ petition was allowed and disposed of, along with the related interim application.