2023 (5) TMI 888 - HC - VAT and Sales Tax

Condonation of delay in filing the application for refund - Refund of Excess Tax - time limitation - application rejected as the same is not made within 180 days. HELD THAT - There is no dispute that vide assessment order dated 06.07.2016 and amount of Rs. 75,59,265/- (Rupees Seventy Five Lakh Fifty Nine Thousand Two Hundred Sixty Five Only) has been held to be payable as refund to the petitioner. There is also no dispute that the statute prescribes the procedure which is to be followed by the department in addressing the refunds. The provisions of the statute read with the Rules thus give power to the authorities to consider such application beyond limitation on such grounds and reasons mentioned as may be applicable. However, in the impugned order dated 29.08.2019 passed by the Superintendent of Taxes, Guwahati, Unit-A, there is no reference to any such grounds or reasons which are stated to have been furnished by the petitioner. It is not the submission of the respondent Department that no such grounds as contended by the petitioner, had been furnished before the Superintendent of Taxes for consideration of the application which was filed beyond limitation, explaining the circumstances under which the delay had occurred. In the opinion of this Court, where the first authority namely the Superintendent of Taxes, Guwahati, Unit-A in his order did not refer to any of the grounds submitted in explaining the delay that had occurred by the petitioner, perhaps there was no occasion for the revisional authority to consider the grounds and render a finding as to whether the same is sufficient or insufficient. Such power under the Act and the Rules is not bestowed upon the revisional authority. Rather it is the assessing authority who is conferred with the powers to grant or reject refund applications beyond the period prescribed upon such consideration of the grounds and reasons mentioned. In the facts and circumstances of the case, it is seen that there is no denial by the respondent department that grounds and reasons were furnished before the assessing authority. Rather From the impugned order dated 25.02.2021 passed by the Revisional authority, it is seen that certain explanations were furnished by the petitioner explaining the delay that had occurred. As such, it is evident that the assessing authority who was required to consider the explanations furnished explaining the delay that had occurred in filing any application for refund did not consider such grounds as the same is not discernable from the impugned order dated 29.08.2019 passed by the respondent No. 4. The apex Court in N Balakrishnan Vs M. Krishnamurthy, 1998 (9) TMI 602 - SUPREME COURT had considered the words sufficient cause . The Apex court held that the primary function of the Court is to adjudicate the dispute between the parties and to advance substantial justice. The time-limit fixed for approaching the Court in different situations is not because on the expiry of such time a bad cause would transform into a good cause. Rules or limitation are not meant to destroy the rights of parties. They are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly. The object of providing a legal remedy is to repair the damage caused by reason of legal injury. Condonation of delay is a matter of discretion of the Court. Section 5 of the Limitation Act does not say that such discretion can be exercised only if the delay is within a certain limit. Length of delay is not matter, acceptability of the explanation is the only criterion - A Court knows that refusal to condone delay would result in foreclosing a suitor from putting forth his cause. There is no presumption that delay in approaching the Court is always deliberate. The words sufficient cause under Section 5 of the Limitation Act should receive a liberal construction so as to advance substantial justice. This Court is of the view that as per the statute it is the assessing authority namely the Superintendent of Taxes, Guwahati, Unit-A, respondent No. 4, who is at the first instance required to consider the grounds furnished by the assessee and render its finding as to whether the same are sufficient explanations for the delay that had occurred. The said authority must also keep in mind that the refund which the petitioner has sought for has already been determined by an adjudicatory process by way of assessment order dated 06.07.2016 passed by the Superintendent of Taxes. Matter is remanded back to the respondent No. 4 to re-decide the issue within a period of four week from the date of receipt of certified copy of this order - Petition allowed by way of remand.

Summary

Issues Involved:
1. Entitlement to refund.
2. Timeliness and procedural compliance of the refund application.
3. Consideration of grounds for condonation of delay.

Summary:

Entitlement to Refund:
The petitioner, a registered dealer under the Assam VAT Act, 2003, claimed a refund of Rs. 75,59,265 for the assessment year 2012-13. The assessing officer determined this amount as refundable after adjusting input tax credit and TDS against the output tax liability. Despite submitting a refund application, the petitioner did not receive the refund, leading to the filing of another application on 18.07.2019.

Timeliness and Procedural Compliance:
The Superintendent of Taxes rejected the refund application on 29.08.2019, citing Section 50 of the Assam VAT Act, 2003, and Rule 29 of the Assam VAT Rules, 2005, which mandate that refund applications must be made within 180 days from the date of assessment. The petitioner's application was deemed time-barred. The Additional Commissioner of Taxes upheld this decision on 25.02.2021, stating there was no substantive evidence justifying the delay.

Consideration of Grounds for Condonation of Delay:
The petitioner argued that the delay in filing the refund application was due to circumstances beyond their control and requested condonation of the delay. The Court noted that the Superintendent of Taxes did not consider the grounds for delay in their order, while the revisional authority did, but found them insufficient. The Court emphasized that the assessing authority is vested with the power to consider such grounds and must do so before rejecting a refund application.

Judgment:
The Court referenced previous judgments, including a Division Bench ruling and an Apex Court decision, which held that refunds due to the assessee cannot be denied on the ground of limitation if sufficient cause is shown. The Court concluded that the assessing authority must consider the grounds for delay and render a decision accordingly. The matter was remanded back to the Superintendent of Taxes to re-decide the refund application, considering the grounds for condonation of delay. The impugned orders dated 29.08.2019 and 25.02.2021 were set aside, and the writ petition was allowed.