2021 (2) TMI 968 - HC - VAT and Sales Tax

Seeking directions to the respondents to disburse the refund amount alongwith interest - reduction of admissible ITC on purchase of coke - Section 38 of the Gujarat Value Added Tax Act, 2003 - HELD THAT - It is not in dispute that the writ applicant-Company was given an incentive on tax for the relevant period as mentioned in the petition by the authority, as sanctioned for the respective years - In view of the determination order passed under Section 80 of the GVAT Act, the full amount of refund has not been disbursed by the respondents. It is an admitted fact that the respondents-authorities have not invoked the Section 39 of the GVAT Act, which provides the powers to withhold the refund in certain cases. The time limit to initiate proceedings under GVAT Act is lapsed. It is required to be noted that Section 35 gives power to the authority to determine the amount of tax in respect of input tax credit etc after following the mandatory procedure as provided under the GVAT Act. However, the powers conferred under Section 35 cannot exercise after the expiry of 5 years from the end of the year in respect of which tax is assessable. Therefore, in view of the Section 35, the time limit is over and the authority now cannot initiate any proceedings in respect of refund. The writ applicants are entitled to get the refund amount and the authorities have no legal justification to withholding the same, which is otherwise refundable to the writ applicants Company, as the action of the respondents authorities is contrary to the provisions of GVAT Act - respondents are directed to disburse the refund amount along with 6% interest within a period of 6 weeks from the date of receipt of this order - application allowed - decided in favor of assessee.

Summary

Issues:
1. Claim for refund under the Gujarat Value Added Tax Act, 2003 for specific assessment years.
2. Dispute regarding the admissibility of input tax credit on the purchase of coke in the manufacture of Pig Iron.
3. Impact of stay order by the Hon'ble Supreme Court on the refund claim.
4. Authority's justification for withholding the refund amount.
5. Interpretation of relevant provisions of the GVAT Act regarding time limits for reassessment and revision of assessment orders.
6. Application of Section 84AA of the GVAT Act and its validity.

Analysis:
1. The writ applications were filed seeking directions for the disbursement of refund amounts for specific assessment years under the Gujarat Value Added Tax Act, 2003. The Company, engaged in manufacturing Pig Iron, had claimed input tax credit for raw materials but faced a dispute regarding the admissibility of credit on the purchase of coke.

2. The dispute arose when the Joint Commissioner determined that a portion of the ITC should be reduced due to the use of coke as fuel. However, the Tribunal ruled in favor of the Company, stating that coke was a raw material. Subsequently, the High Court upheld the Tribunal's decision, which was challenged in the Supreme Court leading to a stay order.

3. Despite the stay order, the Company sought the refund, prompting the High Court to direct the authorities to consider the pending applications. The authorities cited the stay order as a reason for not processing the refund, leading to the Company filing writ petitions for relief.

4. The Company argued that the time limit for reassessment had lapsed, and therefore, the refund should not be withheld. The authorities contended that they had reasons to withhold the refund, as stated in a communication to the Company.

5. The High Court analyzed the relevant provisions of the GVAT Act, noting that the authorities had not invoked Section 39 to withhold the refund and that the time limit for initiating proceedings had expired. The Court also considered the revisional powers under Section 75 and concluded that the time limit for reassessment had lapsed.

6. Additionally, the Court discussed the validity of Section 84AA, which was challenged previously and declared ultra vires. Based on these considerations, the Court held that the Company was entitled to the refund amount. The authorities were directed to disburse the refund along with interest within a specified period.

This detailed analysis of the judgment outlines the issues, legal interpretations, and conclusions reached by the High Court in the case concerning the refund claim under the GVAT Act.