2016 (9) TMI 1219 - HC - VAT and Sales Tax

Refund claim - Section 50 of the VAT Act - refund should have been made within thirty days from the date of the order passed by the first appellate authority. Despite requests made by the petitioner, refund has not been made for more than eight months - Held that - where the appeal is allowed in favour of the petitioner, the duty is cast on the respondents to make refund within the timeframe and in case if it is not refunded, it is the duty of the respondents to inform the assessee the reason for not refunding the amount. Refund has to be made within thirty days unless the said order is stayed under Section 64 of the VAT Act and the stay order be communicated to the petitioner. Stay order passed by the Additional Commissioner, Commercial Taxes - non-communication of stay order to petitioner as he was not found - Held that - Assessing Authority, Commercial Taxes directed to pay the refund amount within one week - refund to be made subject to production of bank guarantee - the petitioner is directed to appear before the Additional Commissioner, Commercial Taxes without awaiting for any notice in this regard, on Wednesday the 31st August, 2016 at 11.00 a.m. and upon appearance, the Additional Commissioner, Commercial Taxes is directed to supply notice, etc. to the petitioner for submitting its reply/defence - petition disposed off - decided in favor of petitioner.

Summary

Issues:
Petitioner seeks refund under VAT Act - Delay in refund - Allegation of prejudice by respondents - Non-communication of stay order by Additional Commissioner, Commercial Taxes.

Analysis:
The petitioner, a Public Limited Company engaged in manufacturing tiles, challenges a reassessment order under the Karnataka Value Added Tax Act, 2003. The first appellate authority allowed the appeal, directing refund and revised demand notice issuance. The petitioner claims non-refund for over eight months, attributing it to respondents' vengeance. The Additional Government Advocate argues for dismissal, citing the Additional Commissioner's suo-motu power to stay orders. The High Court notes the duty to refund within 30 days post-appeal allowance, emphasizing the need for communication if not refunded. The Court finds fault with the lack of notice or communication of the stay order by the Additional Commissioner, directing refund within a week without awaiting notice.

The Additional Government Advocate proposes refund subject to a bank guarantee, prompting the Court to instruct the petitioner to appear before the Additional Commissioner without notice, emphasizing compliance with due process. The petition is disposed of accordingly, addressing the delay in refund and the need for proper communication and adherence to procedural requirements.