2016 (12) TMI 1255 - HC - VAT and Sales Tax

Revision of tax - excess entry tax paid by the petitioner for the relevant assessment years - refund claim - unjust enrichment - Held that - The specific case of the petitioner is that this liability has not been passed on to the customers. Thus, since there is a binding direction issued by this Court, the respondent ought to have passed an order within the time frame fixed by the Court. Failure to obey the order amounts to committing contempt and as long as the order has not been complied with, the disobedience continues and this Court can even at this juncture initiate contempt proceedings. The petitioner is entitled to know as to why the petitioner s applicable for refund should not be ordered. Therefore, the respondent has to necessarily passed a speaking order as this Court has found that the two primary reasons stated in the written instructions dated 02.08.2016 are not tenable - petition allowed by way of remand.

Summary

Issues:
- Petitioner seeks direction to revise excess entry tax paid.
- Interpretation of provisions of Entry Tax Act and TNGST Act.
- Refund of excess entry tax paid by petitioner.
- Respondent's rejection of refund application.
- Pending appeals and constitutional validity of Entry Tax Act.
- Compliance with court orders and contempt proceedings.

Analysis:
1. The petitioner, a Public Limited Company, sought a direction for revising the excess entry tax paid for the relevant assessment years. The company, engaged in tractor manufacturing, paid entry tax on imports into Tamil Nadu from its Haryana factory. The petitioner contended that as a dealer, they were entitled to a reduction in liability under the TNGST Act equal to the entry tax paid under the Entry Tax Act.

2. The assessments under the Entry Tax Act for certain years were not completed by the respondent, leading to excess entry tax payments. The petitioner's request for a refund was initially rejected citing pending writ appeals and constitutional validity challenges. However, a court order set aside the rejection and remanded the matter back to the respondent for fresh consideration.

3. Despite the court order in 2010, the respondent failed to pass any orders for six years. The respondent cited pending appeals and constitutional validity issues as reasons for not considering the refund application. The petitioner clarified that relevant appeals had been disposed of, and the constitutional validity challenge had been resolved by the Supreme Court.

4. The court emphasized that the petitioner had not challenged the provisions of the Entry Tax Act but sought a refund of excess tax paid from their own funds. The court directed the respondent to consider the refund application within a specified timeframe, highlighting that failure to comply could lead to contempt proceedings. The respondent was instructed to pass a speaking order after affording the petitioner a personal hearing.

5. Ultimately, the writ petitions were disposed of with a direction for the respondent to review the refund application and make a decision in accordance with the law within four weeks. The court stressed the importance of adhering to court orders and ensuring proper consideration of the petitioner's request for a refund of excess entry tax paid.