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2019 (3) TMI 443 - HC - VAT and Sales TaxRecovery of tax - the petitioner, an assessee under the KVAT Act, was found entitled to refund for AY 2007-08; it was also found liable under Section 25(1) of the Act for AY 2016-17. As the amount due from it was more than the amount due to it, the assessing authority adjusted the amount to be refunded and, then, demanded the balance amount - Held that - Section 89 of the act plainly reveals that if a dealer has paid tax more than what is due from him, he must have that excess amount refunded to him. Once an assessing authority receives an order from any appellate or revisional authority or any officer under subsection (5) of section 47, to refund tax or penalty to a dealer, he must comply with that - But the assessing authority has the power to adjust the amount due to be refunded towards the recovery of any amount due, on the date of adjustment, from the dealer. If the assessing authority delays refund without justification, the dealer may earn interest @10% p.a. Was the petitioner due to pay any amount to the Department on the date of adjustment ? - Held that - Section 31(1) declares that every dealer liable to pay tax for any return period shall pay the tax within such period as may be prescribed. Then, subsection (3) holds that the adjustment must be of any amount due from the dealer on the date of adjustment. The amount becoming due, I reckon, differs from the dealer s liability to pay. The amount becomes due the moment it is ascertained by the assessing authority, say, through an order of assessment. But the dealer may have breathing time to pay that amount. So, meritless is the petitioner s contention that the amount should not be adjusted until the time frame mentioned under Section 31 (3) gets exhausted. Petition dismissed as has no merit.
Issues:
1. Assessment proceedings for two different years under the Kerala Value Added Tax Act 2003. 2. Refund claim for one year and tax liability imposition for another year. 3. Legality of the assessing officer's actions and adjustment of tax amounts. 4. Delay in passing assessment orders and adjustment of refund amounts. Analysis: Issue 1: Assessment Proceedings for Two Different Years The petitioner, a dealer under the Kerala Value Added Tax Act 2003, faced assessment proceedings for the assessment years 2007-08 and 2016-17. The assessing officer re-opened the assessment for 2007-08 and imposed a tax liability, which was challenged by the petitioner through a statutory appeal. The petitioner also requested to revise returns for the year 2016-17. Issue 2: Refund Claim and Tax Liability Imposition The assessing officer passed orders for both assessment years: Ext.P10 for 2016-17 determining the tax liability and Ext.P11 for 2007-08 granting a tax refund. However, the assessing officer adjusted the refund amount towards the alleged liability under Ext.P10, leading to a demand notice for the balance amount. The petitioner contested these orders through a writ petition. Issue 3: Legality of Assessing Officer's Actions The petitioner argued that the assessing officer's actions were flawed, especially concerning the adjustment of amounts and the timing of proceedings. The petitioner contended that the assessing officer should not have pursued proceedings under Section 25(1) while a revision application was pending. The petitioner also raised concerns about the adjustment process and the lack of proper notice under Section 31(2) of the Act. Issue 4: Delay in Passing Orders and Adjustment of Refund The delay in passing the Ext.P11 order for 2007-08 was challenged by the petitioner, attributing it to administrative reasons. The petitioner highlighted the assessing officer's adjustment of refund amounts and argued that it should have been allowed to challenge the assessment before adjustments were made. Conclusion The court analyzed Sections 31(2) and 89(3) of the Act concerning payment, recovery, and refunds. The court determined that the assessing authority was within its rights to adjust amounts due on the date of adjustment, even if the dealer had a period to pay the assessed tax. The court dismissed the writ petition, noting that the petitioner's contentions lacked merit, especially since no appeal had been filed.
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