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2016 (5) TMI 221 - HC - VAT and Sales TaxNature of amount deposited - deposited as per order of Tribunal - Whether by way of pre-deposit or payment of tax - Held that - as per provisions of sub-section (4) of section 73 of the GVAT Act it appears that while the amount deposited under section 35F of the Central Excise Act 1944 and section 129E of the Customs Act is by way of deposit pending the appeal the amount paid under sub-section (4) of section 73 of the GVAT Act appears to be in the nature of payment of tax. However it is not necessary to enter into any discussion in that regard inasmuch as in the present case the amount deposited by the respondent is not under subsection (4) of section 73 of the GVAT Act nor has the appellate authority passed any order under the proviso to subsection (4) of section 73 of the GVAT Act. From the language employed in this court orders it is clear that what the respondent has been directed to pay is by way of pre-deposit and not payment of tax under the orders which were subject matter of challenge before the Tribunal. Therefore the amount deposited by the respondent being in the nature of pre-deposit once the Tribunal has allowed the appeals and decided the same in favour of the respondent the consequence would be automatic and the respondent would be entitled to refund of the amount paid by way of predeposit. Refund of excess amount of tax paid - Section 36 of the GVAT Act - Petitioner submitted that the expression used is paid which is distinct from the expression deposit . Therefore section 36 of the GVAT Act would not be applicable to the facts of the present case - Held that - Section 36 of the GVAT Act provides for refund of excess payment and lays down that subject to the other provisions of the Act and the rules the Commissioner may refund to a person the amount of tax penalty and interest if any paid by such person in excess of the amount due from him. Provided that the Commissioner shall first apply such excess towards the recovery of any amount due under the Act or the earlier laws and shall then refund only the balance amount if any; provided further that no adjustment under the provision shall be made towards a recovery of an amount due that has been stayed by an appellate authority. On a perusal of the provisions of section 36 of the GVAT Act as a whole there is nothing therein to indicate that the same requires an application to be made prior to refund of any amount by a person. Moreover what section 36 of the Act contemplates is refund of any amount of tax penalty and interest paid by a person in excess of the amount due from him. As the amount paid by the respondent is by way of a pre-deposit pursuant to the above order passed by this court which in terms of the said order would enure till the final disposal of the appeals. Therefore such amount cannot be termed as an amount of tax paid as envisaged under sub-section (1) of section 36 of the GVAT Act. The amount deposited by the respondent being in the nature of pre-deposit and not payment of tax under the provisions of the Sales Tax Act the amount deposited by it is bound to be refunded in view of the fact that the appeal has been allowed by the Tribunal. Whether the Tribunal acted within the bounds of its jurisdiction in issuing directions of the refund of amount deposited by the respondent by way of pre-deposit pursuant to the above order passed by this court - Held that - as per provisions of GVAT Act it is evident that there is no provision therein for return of the amount deposited by way of pre-deposit during the pendency of the appeal. A perusal of the Gujarat Value Added Tax Tribunal Regulation 2008 shows that the same contains provisions which are in pari materia to that of the Gujarat Primary Education Tribunal (Procedure) Order 1987. Regulation 44 bears the heading Tribunal to follow provisions of Civil Procedure Code in the matters not provided in these regulations and postulates that the Tribunal shall in any matter not provided for in these regulations follow the procedure as far as it is applicable laid down in the Code of Civil Procedure 1908 as may be amended from time to time. Having regard to the similarity of the provisions under two regulations the court is of the view that the decision of this court in the case of Girishchandra R. Bhatt v. Dineshbhai V. Sanghvi Principal and others 1995 (12) TMI 388 - GUJARAT HIGH COURT would be squarely applicable to the facts of the present case. Propriety of Tribunal in entertaining the applications - appeal filed by the petitioner was pending before this court - return of the amount of pre-deposit - Held that - refund of the amount of pre-deposit is consequential of the orders of the Tribunal and the same has no connection with the appeals preferred by the petitioner before this court. As rightly submitted by the learned counsel for the respondent even if the orders of the Tribunal were to be stayed the assessment orders would not spring into operation entitling the petitioner to recover the amount under the same. The impugned order passed by the Tribunal therefore cannot in any manner be said to come in conflict with any order that may be passed by the High Court in the appeals. Having regard to distinct nature of the proceedings before the High Court and before the Tribunal it cannot be said that the order passed by the Tribunal lacks propriety. - Decided against the revenue.
Issues Involved:
1. Jurisdiction of the Tribunal to issue refund orders post-decision of appeals. 2. Nature and treatment of pre-deposit amounts. 3. Applicability of Section 36 and Section 39 of the Gujarat Value Added Tax Act (GVAT Act) for refund of pre-deposit. 4. Propriety of Tribunal's actions during the pendency of appeals before the High Court. Issue-wise Detailed Analysis: 1. Jurisdiction of the Tribunal to Issue Refund Orders Post-Decision of Appeals: The primary contention was whether the Tribunal had the jurisdiction to issue refund orders after deciding the appeals. The petitioner argued that the Tribunal became functus officio (without further authority) after deciding the appeals and could not issue any further orders. The court examined the Tribunal's powers and concluded that the Tribunal retains the authority to enforce its decisions, including issuing refund orders for pre-deposits made during the appeal process. The court referenced the Gujarat Value Added Tax Tribunal Regulations, 2008, which allow the Tribunal to follow the Civil Procedure Code in matters not explicitly provided for, implying that the Tribunal can enforce its orders. 2. Nature and Treatment of Pre-Deposit Amounts: The court clarified that the pre-deposit made by the respondent was not a payment of tax but a security deposit to stay the recovery of the tax demand during the pendency of the appeal. The court drew on precedents, including the Bombay High Court's rulings in *Suvidhe Ltd. v. Union of India* and *Nelco Limited v. Union of India*, to assert that pre-deposits are meant to secure the right of appeal and are refundable upon the successful outcome of the appeal. Consequently, the Tribunal's order to refund the pre-deposit was deemed appropriate since the respondent had won the appeal. 3. Applicability of Section 36 and Section 39 of the GVAT Act for Refund of Pre-Deposit: The petitioner contended that the respondent should have filed a refund application under Section 36 of the GVAT Act. However, the court noted that Section 36 pertains to the refund of excess tax paid, not pre-deposits. The court also examined Section 39, which allows withholding refunds if an appeal or other proceeding is pending and the Commissioner believes a refund could adversely affect revenue. The court found no evidence that the Commissioner had exercised this power in the respondent's case. Thus, the court concluded that the provisions of Sections 36 and 39 were not applicable to the pre-deposit refund. 4. Propriety of Tribunal's Actions During the Pendency of Appeals Before the High Court: The petitioner argued that the Tribunal should not have issued refund orders while appeals against the Tribunal's decisions were pending before the High Court. The court observed that the appeals before the High Court were related to the merits of the tax assessments, not the pre-deposit. The court emphasized that the pre-deposit was a separate matter and its refund was a direct consequence of the Tribunal's decision in favor of the respondent. The court further noted that even if the High Court stayed the Tribunal's decision, it would not revive the original tax assessment orders, and therefore, the Tribunal's order to refund the pre-deposit did not conflict with the appeals pending before the High Court. Conclusion: The court dismissed the petitions, upholding the Tribunal's jurisdiction and propriety in ordering the refund of the pre-deposit. The court reinforced that the pre-deposit was not a tax payment but a security for the appeal, refundable upon the appeal's success. The court found no basis for applying Sections 36 and 39 of the GVAT Act to the pre-deposit and ruled that the Tribunal acted within its powers and appropriately, even with the pending appeals before the High Court. The interim relief granted earlier was vacated, and no costs were ordered.
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