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2022 (2) TMI 726 - HC - VAT and Sales TaxRefund of tax collected from the petitioner and deposited by the seller along with appropriate interest on such refund amount - principal argument of Mr. Sheth is that the respondents have wrongly declined to refund the amount of excess tax collected and deposited with them despite the fact that the High Court of Bombay in the case of the writ applicant itself in ASAHI INDIA GLASS LTD. VERSUS STATE OF MAHARASHTRA OTHERS 2020 (12) TMI 694 - BOMBAY HIGH COURT has directed the respondents to issue necessary C Forms to the writ applicant. HELD THAT - When the C Forms issued by the Maharashtra Sales Tax Department came to be produced before the respondents herein for the purpose of seeking refund of tax amount of ₹ 1,87,69,739/- under the C.S.T. Act, two fold objections were raised by the respondent first, the writ applicant is not registered within the State of Gujarat and secondly, the order passed by the Bombay High Court is an interim order - both the objections raised on behalf of the respondents are not tenable in law. The respondents are directed to forthwith refund the tax amount of ₹ 1,87,69,739/- under the C.S.T. Act collected from the writ applicant. Let this entire exercise be undertaken and completed within a period of four weeks from the date of receipt of the writ of this order - Application allowed.
Issues Involved:
1. Refund of excess tax collected 2. Issuance of 'C' Forms 3. Registration status of the petitioner in Gujarat 4. Applicability of the principle of unjust enrichment 5. Compliance with previous court orders Detailed Analysis: Issue 1: Refund of Excess Tax Collected The petitioner, a public limited company, sought a writ of mandamus for the refund of ?1,87,69,739 under the CST Act, which was collected and deposited by the seller. The petitioner's principal argument was that the respondents wrongly declined to refund the excess tax despite a favorable order from the Bombay High Court directing the issuance of 'C' Forms. Issue 2: Issuance of 'C' Forms The Bombay High Court had previously directed the issuance of 'C' Forms to the petitioner, which the Maharashtra Sales Tax Department complied with. However, when these forms were produced before the respondents for the refund, the respondents raised objections, stating that the petitioner was not registered in Gujarat and that the Bombay High Court's order was interim. Issue 3: Registration Status of the Petitioner in Gujarat The respondents argued that the petitioner was not registered in Gujarat, thus not entitled to the refund. The court referenced the case of J.K. Cement Ltd vs. State of Gujarat, where it was held that the ultimate burden of tax lay on the petitioner, making them eligible for the refund despite not being registered in Gujarat. The court emphasized that denying the refund based on registration status was not legally tenable. Issue 4: Applicability of the Principle of Unjust Enrichment The court addressed the principle of unjust enrichment, stating that the seller (Reliance Industries Limited) had collected the tax from the petitioner, and thus, the petitioner bore the ultimate burden. Consequently, only the petitioner was entitled to the refund. The court noted that if the seller sought the refund, it would be barred by the principle of unjust enrichment. Issue 5: Compliance with Previous Court Orders The court noted that the Rajasthan High Court had directed the issuance of 'C' Forms and the refund of excess tax collected. The Gujarat High Court's decision, which was challenged and upheld by the Supreme Court, also supported the petitioner's entitlement to the refund. The Supreme Court dismissed the Special Leave Petition by the State of Gujarat, affirming the High Court's ruling and directing compliance with the refund order. Conclusion: The court found the respondents' objections untenable and directed them to refund the tax amount of ?1,87,69,739 to the petitioner within four weeks. The court emphasized that the petitioner's entitlement to the refund was well-established through various judicial pronouncements, and any delay in processing the refund was unjustified.
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