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2023 (2) TMI 886 - HC - VAT and Sales TaxJurisdiction - Grant of refund of the excess amount of tax paid by the appellant as determined by the Assessing Authority - whether the Commissioner had jurisdiction under Rule 36 of the Haryana General Sales Tax Rules read with Section 43 of the Haryana General Sales Tax Act to reject the refund and to go into the merits of the assessment framed by the Assessing Authority? HELD THAT - The issue culled out hereinabove is no longer res integra. A Division Bench of this Court in RAGHBAR DASS HUKAM CHAND CO. JAI BHARAT GUM CHEMICAL LTD. SHIV SHAKTI RICE MILLS BHARAT INDUSTRIAL ENTERPRISES LTD. VERSUS STATE OF HARYANA AND OTHERS 2009 (5) TMI 869 - PUNJAB AND HARYANA HIGH COURT had precisely dealt with the question of law i.e. whether the higher authorities in the hierarchy of Sales Tax Department, Haryana in the garb of exercising power of granting sanction under Rule 36 of Haryana General Sales Tax Rules to the refund orders passed by the Assessing Officer, could set aside such order of assessment? View taken was that irrespective of merits of the case the refund has to follow order of the Assessing Authority and in proceedings for determining refund, only question was of quantification of refund. The impugned order passed by the Haryana Tax Tribunal dated 01.07.2005 (Annexure A-7) cannot sustain. The appellant-company consequently would be entitled to the refund in the light of the assessment order dated 11.02.2003 (Annexure A-1) pertaining to the assessment year 1998-99. Appeal allowed.
Issues:
1. Jurisdiction of the Commissioner to reject the refund and review the assessment. 2. Validity of the order of the Haryana Tax Tribunal. Analysis: Issue 1: Jurisdiction of the Commissioner to reject the refund and review the assessment The appellant, a company engaged in construction activities, sought a refund of excess tax paid on rental income of machinery and equipment rented out to another company. The Assessing Authority initially approved the refund based on the situs of the agreement outside Haryana. However, the Commissioner declined to approve the refund exceeding Rs. 10 lakhs, citing unjust enrichment. The High Court examined the jurisdiction of the Commissioner under Rule 36 of the Haryana General Sales Tax Rules and Section 43 of the Act. Referring to precedent, the Court held that the higher authorities cannot set aside the assessment order of the Assessing Authority while determining the refund amount. The Court relied on the Division Bench's decision in Raghbar Dass Hukam Chand vs. State of Haryana, affirming that the refund must follow the order of the Assessing Authority, and the Commissioner's role is limited to quantifying the refund amount. Thus, the Commissioner's rejection of the refund was deemed unjustified, and the appellant was entitled to the refund as per the initial assessment order. Issue 2: Validity of the order of the Haryana Tax Tribunal The Haryana Tax Tribunal had upheld the Commissioner's decision to refuse the refund based on the principle of unjust enrichment. However, the High Court found the Tribunal's order unsustainable in light of the established legal principle that the refund determination should align with the Assessing Authority's assessment order. Citing previous judgments, including Jai Bharat Gum and Chemicals Ltd. vs. State of Haryana, the Court reiterated that the Tribunal's decision was flawed as it deviated from the legal framework governing refund approvals. Consequently, the High Court allowed the appeal in favor of the appellant, emphasizing their entitlement to the refund as per the initial assessment order.
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