2024 (6) TMI 172 - HC - VAT and Sales Tax

Refund of excess tax - Collection of entry tax from the petitioner Company on entry of packing materials into the State of Assam for packing of goods for sale - HELD THAT - A bare reading of Rule 29(1) of the Assam Value Added Tax Rules, 2005 indicates that a time frame is prescribed for making the application for refund in the prescribed Form, i.e, Form 37. Further, power is also given to the prescribed authority to condone the delay for filing the application within the prescribed period, if sufficient cause is shown. What transpires from the above is that there is a detailed mechanism prescribed under the provisions of law for claiming refund. It appears from the decision of this Court in TATA TEA LTD. AND ANR. VERSUS THE STATE OF ASSAM AND ORS 2015 (3) TMI 1438 - GAUHATI HIGH COURT , that there is no entry tax leviable on the packing materials. In such situation, it appears that the petitioner has paid tax in excess of what was due to him. Be that as it may, as the Act and Rules provides a mechanism for filing application for refund in such situation, this Court is of the view that the petitioner has approached this Hon ble Court by not exhausting the remedy provided under the law and hence, is not entitled for any relief from this Court. As such, there is no justification for keeping this matter pending any longer. This Court directs that the petitioner be at liberty to make an application under Section 50 of the Act by submitting all the details in the prescribed form within a period of 1(one) month from today and if such application is made, the authorities in calculating the prescribed time shall exclude the time spent from filing the writ petition till submission of the application as directed and thereafter, consider the application for refund on its merit. The petition is disposed off.

Summary

Issues: Challenge to entry tax collection on packing materials, maintainability of the writ petition, availability of refund under the Assam Value Added Tax Act, 2003.

Analysis:
1. The writ petition challenged the collection of entry tax on packing materials by the respondent authorities. The petitioner argued that as per relevant laws, no entry tax should be levied on packing materials sold along with goods inside the State of Assam.

2. The petitioner sought a refund of substantial amounts paid as entry tax on packing materials for various financial years. The petitioner's counsel referred to a prior case where the court had ruled against levying entry tax on packing materials.

3. The respondent, represented by the Standing Counsel, Finance Taxation Department, contended that the petition was not maintainable as the petitioner could claim a refund under the Assam Value Added Tax Act, 2003, rendering the writ petition unnecessary.

4. The court examined Section 50 of the Assam Value Added Tax Act, 2003, which allows dealers to claim refunds for excess tax paid within the prescribed time and manner. The provision outlines the procedure for claiming refunds, including approval requirements for refund amounts exceeding specified limits.

5. Rule 29 of the Assam Value Added Tax Rules, 2005, further details the process for refund applications, specifying time frames for submission and conditions for approval. The rule empowers the prescribed authority to reject claims based on certain criteria.

6. The court acknowledged the detailed mechanism provided by the law for claiming refunds and noted that the petitioner had paid tax in excess of the due amount, as per the previous court decision on entry tax on packing materials.

7. However, the court held that the petitioner had not exhausted the remedy provided by law for claiming refunds before approaching the court. Consequently, the court ruled that the petitioner was not entitled to relief through the writ petition.

8. Despite dismissing the writ petition, the court, in the interest of justice, allowed the petitioner to submit a refund application under Section 50 of the Act within one month. The court directed the authorities to consider the application, excluding the time spent on the writ petition, and complete the process within two months from the application submission date.

9. The court disposed of the writ petition with the above directions, emphasizing the importance of following the prescribed refund procedure under the law.