2016 (3) TMI 791 - HC - VAT and Sales Tax

Seeking direction for refund of TNGST and CST amounts - Amount paid for the period covered by the Interest Free Sales Tax Deferral Scheme as per Government Order - Respondent pleaded that petitioner is entitled to get a sum of ₹ 34,48,319/-, however, instead of getting refund of the said amount, the respondent may be directed to adjust the said amount towards the existing dues of the sales tax payable by the petitioner, in accordance with law - Held that - since the respondent had rejected the request made by the petitioner for the refund of the sum of ₹ 34,48,319/- by the impugned proceedings, which is contrary to the Government Order passed by the Government of Tamil Nadu, the same is liable to be set aside. The respondent is directed to adjust the sum of ₹ 34,48,319/- towards the existing dues of the Sales tax of the petitioner and in case of any excess amount payable by the petitioner over and above the said sum, the petitioner shall pay the excess amount towards the existing sales tax dues. Petition disposed of

Issues:
1. Eligibility for Sales Tax Deferral Scheme
2. Implementation of BIFR order by Commercial Tax Department
3. Refund of TNGST and CST amounts paid
4. Rejection of refund request by the respondent
5. Adjustment of refund amount towards existing dues
6. Direction for payment of excess amount, if any

Eligibility for Sales Tax Deferral Scheme:
The petitioner, engaged in manufacturing writing and printing paper, claimed eligibility for the Interest Free Sales Tax Deferral Scheme approved by the Government of Tamil Nadu. The scheme provided a deferral period from 01.02.1995 to 31.01.2004, with a repayment period of 9 years. Subsequently, the repayment schedule was revised, starting from 01.04.2005. The petitioner contended that they were entitled to the scheme benefits, including deferral of sales tax not exceeding a specified amount.

Implementation of BIFR order by Commercial Tax Department:
Following the petitioner company being declared a Sick Unit, the matter was referred to the BIFR, which sanctioned a rehabilitation scheme directing the Commercial Tax Department to extend the time for utilizing unutilized interest-free Sales Tax loan and reschedule the loan repayment period. Despite the BIFR's orders, the Commercial Tax Department allegedly failed to implement the directives, leading to the petitioner seeking court intervention through a writ petition.

Refund of TNGST and CST amounts paid:
The petitioner, having paid TNGST and CST for the period April 2005 to February 2007 before the rescheduling ordered by the Government, sought a refund based on the revised scheme provisions. The petitioner argued that in light of the Government's order, they should not be required to pay the said amounts and thus requested a refund from the respondent.

Rejection of refund request by the respondent:
The respondent rejected the petitioner's claim for a refund on 21.05.2012, contrary to the Government Order issued on 03.02.2011, prompting the petitioner to file a writ petition challenging the decision. The court noted that the rejection was inconsistent with the Government's directive and therefore set aside the respondent's decision.

Adjustment of refund amount towards existing dues:
The court directed the respondent to adjust the refunded amount towards the petitioner's existing sales tax dues. Additionally, if any excess amount was found due from the petitioner beyond the refunded sum, they were instructed to pay the excess amount towards the outstanding sales tax liabilities.

Direction for payment of excess amount, if any:
Both parties agreed that any excess tax due beyond the refunded sum would be paid by the petitioner. The court, considering the submissions, set aside the respondent's decision and directed the adjustment and payment of amounts as per the directives outlined in the judgment.

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