2021 (3) TMI 275 - HC - VAT and Sales Tax

Refund of excess tax paid - refusal to issue C-Form declarations - purchase of HSD at concessional rate - stand taken by the respondent authorities while rejecting the representation of the Petitioner/ Company is that the excess tax can be refunded only to those from whom it was charged as per as per the Section 20 (1) and (7) of HVAT Act - period October 2017 to March 2018 - HELD THAT - A similar controversy came up for consideration before this Court in the case of Carpo Power Limited (supra) as also before Gujarat High Court in J.K. CEMENT LTD. VERSUS STATE OF GUJARAT 2020 (3) TMI 140 - GUJARAT HIGH COURT , wherein a number of judgments of the Hon ble Supreme Court have been discussed and it has been held that The respondents are directed to forthwith process the refund claims of the respective petitioners and grant refund of the tax amount collected from the petitioners and deposited by the seller in accordance with law within a period of twelve weeks of the receipt of a copy of this judgment. Thus, it can be safely concluded that the HSD has been purchased by the Petitioner/ Company from Indian Oil Corporation in the course of inter-State trade for use in mining activities and therefore, the question of passing of the tax burden to anyone would not arise and the respondent authorities are not justified in not processing the refund claims of the Petitioner / Company. The respondents are directed to process the refund claim of the petitioner and grant refund of the tax amount collected from the petitioner and deposited by the seller, in accordance with law within a period of four (04) weeks from the date of receipt of certified copy of this judgment - petition allowed.

Summary

Issues:
1. Refund of excess tax under the Central Sales Tax Act.
2. Application of refund provisions of the Haryana Value Added Tax Act.
3. Interpretation of Section 20(5), 20(1), and 20(7) of the HVAT Act.

Refund of Excess Tax under the Central Sales Tax Act:
The petitioner, a mining company registered under the Central Sales Tax Act, sought a refund of excess tax paid on High Speed Diesel (HSD) purchased from Indian Oil Corporation due to the absence of C-Form declarations. The State of Rajasthan refused to issue C-Forms, leading to the petitioner paying a higher tax amounting to ?93,72,244. The petitioner approached the Rajasthan High Court, which allowed the refund. The State of Rajasthan's appeal was dismissed by the Supreme Court, and C-Forms were issued to the petitioner. The petitioner then sought a refund from the Deputy Commissioner, Panipat, Haryana, which was rejected. The petitioner contended that the excess tax should be refunded under the CST Act, not the HVAT Act.

Application of Refund Provisions of the Haryana Value Added Tax Act:
The respondents argued that the rejection of the refund claim by the Deputy Commissioner was in line with the provisions of Section 20(1) and (7) of the HVAT Act. They contended that the excess tax could only be refunded to those from whom it was charged. The petitioner, on the other hand, relied on Section 20(5) of the HVAT Act, stating that any aggrieved person can seek a refund by establishing a case for refund. The dispute centered on whether the refund should be governed by the CST Act or the HVAT Act.

Interpretation of Section 20(5), 20(1), and 20(7) of the HVAT Act:
The Court analyzed Section 20(5), 20(1), and 20(7) of the HVAT Act. Section 20(5) mandated refund on court orders, while Sections 20(1) and (7) outlined conditions for refunding excess tax charged. The petitioner had proof of bearing the excess tax burden. The Court referred to precedents from Carpo Power Limited and J.K. Cement Ltd., emphasizing that refund claims should be processed promptly. The judgment highlighted that the petitioner, as the ultimate consumer of HSD for mining activities, was entitled to claim the refund, and the authorities were not justified in rejecting the claim.

In conclusion, the Court allowed the writ petition, directing the respondents to process the refund claim of the petitioner within four weeks. It clarified that once the refund was processed, Indian Oil Corporation would not be entitled to claim any refund. The judgment emphasized the rightful entitlement of the petitioner to seek a refund of the excess tax paid under the CST Act, ensuring justice and adherence to legal provisions.