2019 (8) TMI 866 - HC - VAT and Sales Tax

Refund of the excess input tax credit - while processing refund application dept proposed to retrieve a total input tax credit along with interest and on the basis of the revised assessment finalization - Single Judge had considered the prima facie merit of the contentions raised by the appellant, however, the appellant was relegated to avail the statutory remedy - HELD THAT - We cannot hold that the approach of the learned Judge is in any manner illegal, erroneous or improper. There exists no merit to reverse such a finding, in exercise of the appellate jurisdiction. At the same time, we take note of the observations contained in the impugned judgment to the extent of the learned Single Judge finding a strong prima facie case in favour of the appellant. Therefore we are of the opinion that, considering the special circumstances prevailing, interest of justice could be achieved by directing consideration of the appeal itself by the statutory appellate authority on an expeditious basis and till then to direct deferment of collection and recovery of the disputed amounts. We grant two weeks time from today to the appellant to file statutory appeals against Ext.P6 P6 (a) orders. If the appeals are filed within the time stipulated, the statutory appellate authority shall consider the same as appeals filed within the time stipulated; and shall proceed to dispose of the appeals after affording opportunity of hearing to the parties concerned, at the earliest, at any rate, within a period of 2 months from the date of receipt of such appeals. Till the disposal of the appeals as directed above, realization of the disputed amount in Ext.P6 shall be kept in abeyance. Appeal disposed off.

Summary

Issues:
1. Appeal against judgment of Single Judge regarding refund of excess input tax credit under Kerala Value Added Tax Act, 2003.
2. Disallowance of input tax credit and rejection of refund application by the assessing authority.
3. Challenge to the orders of assessment and refund rejection on grounds of perversity and lack of application of mind.
4. Disposition of the writ petition by the learned Single Judge, directing the appellant to file statutory appeal and seeking a stay against the implementation of the assessment order.
5. Arguments presented by the appellant's counsel and the Government Pleader regarding the necessity of pursuing the appellate remedy and payment of court fees.
6. Analysis of the learned Single Judge's decision to relegate the appellant to avail the statutory remedy, while finding a strong prima facie case in favor of the appellant.

Analysis:
1. The appellant filed a return under the Kerala Value Added Tax Act, 2003, for the assessment year 2014-2015, claiming input tax credit and refund. The assessing authority proposed to disallow a significant amount of input tax credit, leading to rejection of the refund application. The appellant challenged these decisions in a writ petition, alleging perversity and lack of consideration of objections. The Single Judge directed the appellant to pursue the statutory appeal process and seek a stay against the assessment order's implementation.

2. The appellant contended that the assessing authority's orders displayed explicit perversity and a lack of application of mind, warranting quashing under Article 226 of the Constitution of India. The Government Pleader argued that the appellate remedy should be pursued for a detailed examination of factual aspects, including the appellant's books of accounts. The court acknowledged the prima facie merit of the appellant's contentions but upheld the Single Judge's decision to opt for the statutory remedy.

3. The court emphasized the efficacy of the appellate process and directed the appellant to file statutory appeals against the assessment and refund rejection orders within two weeks. The appellate authority was instructed to expedite the disposal of the appeals, ensuring a hearing for all concerned parties within two months from the receipt of the appeals. Until the appeal's resolution, the collection and recovery of the disputed amounts were stayed.

4. The court clarified that the relief granted was based on the specific circumstances of the case and should not be considered a precedent for future cases. The decision balanced the appellant's right to appeal with the need for a proper examination of facts through the statutory appellate process, ensuring justice and fairness in the resolution of the dispute.