2023 (2) TMI 2 - HC - VAT and Sales Tax

Direction to grant outstanding refund for the year 2008-2009 along with proportionate interest - time limit for re-assessment under the VAT Act expired or not - HELD THAT - After filing of the annual return, the time limit for assessment and re-assessment under the VAT Act had expired and no assessment or re-assessment is pending at this stage, this writ petition is allowed with the direction to the respondents to grant the refund of Rs.13,82,437/- due as per the self-assessment return under the VAT Act for the year 2008-2009 along with statutory interest payable on such refund within a period of six weeks from the date of receipt of the writ of this order. Petition disposed off.

Summary

Issues:
Claim for outstanding refund amount for the year 2008-2009 under Article 226 of the Constitution of India.

Analysis:
The petitioner, a proprietorship concern trading in chemicals, sought a refund of Rs.13,82,437/- for the year 2008-2009 due to unutilized input tax credit balance resulting from higher tax rate on inputs than output tax rate on inter-State sales under the CST Act. Despite reminders and requests for assessment, the authorities did not grant the refund. The petitioner approached the High Court under Article 226 for direction to the respondents to release the outstanding refund amount along with interest.

The petitioner argued that as the time limit for re-assessment under the VAT Act had expired, and no assessment order had been issued, the refund should be granted. The petitioner relied on two previous court decisions to support their claim. The respondent did not dispute the applicability of the cited decisions and acknowledged that no assessment was pending for the year 2008-2009.

Considering the circumstances where no assessment or re-assessment was pending after the expiry of the time limit, the High Court, comprising Honourable Mrs. Justice Mauna M. Bhatt, allowed the writ petition. The court directed the respondents to grant the refund of Rs.13,82,437/- as per the self-assessment return under the VAT Act for the year 2008-2009, along with statutory interest, within six weeks from the date of the order. The petition was disposed of without costs.

This judgment highlights the importance of timely assessment and refund processing under tax laws, emphasizing the rights of taxpayers to claim refunds within the legal framework. The court's decision to uphold the petitioner's claim based on previous precedents reinforces the principle of consistency and adherence to legal provisions in matters of taxation and refunds.