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2017 (4) TMI 1505 - AT - VAT and Sales TaxDeduction of TDS on the strength of original TDS Certificates - adjustment of demand raised under the CST Act against the amount of refund accrued under the GVAT Act with circumferential effect on the calculation of interest - impounding u/s 9(2) of the CST Act - removal of interest since the demand is required to be recovered from the refund accrued under the GVAT Act - HELD THAT - The appellant has collected excess tax to the tune of ₹ 1,81,49,641/- contravening the provisions of the Central Sales Tax Act, 1956, however, since, unlike the GVAT Act, the CST Act does not provide for forfeiture of such excess tax, the order of the first appellate authority, confirming the forfeiture of tax by the assessing authority, is required to be set aside. We also allow the appellant s plea under the GVAT Act for rectification of TDS amount of ₹ 22,287/- in absence of any adverse evidence produced by the department. Second Appeal are hereby allowed. Appellant s plea for grant of credit of TDS amount of ₹ 22,287/- is allowed in the absence of any adverse evidence produced by the department - The impugned order of the first appellate authority confirming the forfeiture of excess collection of tax under the CST Act contested is also set aside.
Issues Involved:
1. Claim of Tax Deducted at Source (TDS) under the GVAT Act. 2. Adjustment of demand under the CST Act against the refund under the GVAT Act. 3. Impounding of excess tax under the CST Act. 4. Removal of interest due to adjustment of demand and refund under the CST Act. Issue-wise Detailed Analysis: 1. Claim of Tax Deducted at Source (TDS) under the GVAT Act: The appellant argued that the first appellate authority granted only partial relief for TDS, allowing ?24,31,372/- against a total claim of ?24,53,659/-, leaving ?22,287/- unaddressed without any justification. The appellant had filed a rectification application for this discrepancy, which remained unheard. The Tribunal allowed the appellant’s plea for the TDS amount of ?22,287/- due to the absence of any adverse evidence from the department. 2. Adjustment of demand under the CST Act against the refund under the GVAT Act: The appellant contended that the first appellate authority failed to adjust the demand under the CST Act against the refund accrued under the GVAT Act. The Tribunal agreed with the appellant's submission that such adjustment is mandatory and directed the first appellate authority to resolve this issue as part of the rectification application. 3. Impounding of excess tax under the CST Act: The appellant claimed an illegal denial of a refund of ?1,81,49,641/- paid under the CST Act due to an incorrect tax rate applied by mistake. The first appellate authority had confirmed the impounding of this amount under Section 31(3) of the GVAT Act, which the appellant contested, arguing that there is no enabling provision for such forfeiture under the CST Act. The Tribunal found that the CST Act does not have provisions for forfeiture of excess tax collected, unlike the GVAT Act. It concluded that the first appellate authority was not justified in confirming the forfeiture and set aside the order, allowing the appellant's claim for the refund of the excess tax paid. 4. Removal of interest due to adjustment of demand and refund under the CST Act: The appellant sought the removal of interest amounting to ?13,83,697/- on the grounds that the demand should be adjusted against the refund under the GVAT Act. The Tribunal allowed this plea, directing the first appellate authority to pass consequential orders in accordance with the law. Conclusion: The Tribunal allowed both Second Appeal Nos. 339 and 340 of 2016. It directed the first appellate authority to grant the TDS amount of ?22,287/- and set aside the order confirming the forfeiture of excess tax under the CST Act. The first appellate authority was instructed to pass consequential orders within three months. There was no order as to costs.
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