2024 (6) TMI 365 - HC - VAT and Sales 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 - Section 321 of the Entry Tax Act, 2008 - HELD THAT - It appears that under Section 50 a dealer can claim refund in the prescribed manner and within the prescribed time in case the dealer has paid tax in excess of what is due from him. A bare reading of Rule 29 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 - 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. 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. However, in the interest of justice, 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 impugned actions of respondent authorities in collecting entry tax on packing materials. Maintainability of the writ petition for claiming refund under the Assam Value Added Tax Act, 2003.

Analysis:
The petitioner filed a writ petition challenging the collection of entry tax on packing materials under Article 226 of the Constitution of India. The petitioner argued that Section 321 of the Entry Tax Act, 2008, when read with Section 10(2) of the Assam Value Added Tax Act, 2003, exempts entry tax on packing materials sold along with goods inside the State of Assam. The petitioner sought a refund of Rs. 25,27,539/- for the entry tax paid on packing materials. The counsel for the petitioner cited a previous case where the court held that no entry tax should be levied on packing materials. On the other hand, 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.

The court noted that Section 50 of the Assam Value Added Tax Act, 2003 allows a dealer to claim a refund if tax has been paid in excess of the amount due. The court also referred to Rule 29 of the Assam Value Added Tax Rules, 2005, which prescribes the procedure for claiming a refund, including a time frame for submitting the application in the prescribed form. The court observed that there is a detailed mechanism in place for claiming a refund under the law.

While acknowledging that the petitioner might have paid tax in excess of what was due, the court held that the petitioner had not exhausted the remedy provided under the law. Therefore, the court concluded that the petitioner was not entitled to relief through the writ petition. However, in the interest of justice, the court allowed the petitioner to make an application under Section 50 of the Act within one month, excluding the time spent from filing the writ petition. The court directed the authorities to consider the application for refund on its merits within two months from the submission of the application.

In conclusion, the court disposed of the writ petition, emphasizing that the petitioner should follow the prescribed procedure for claiming a refund under the Assam Value Added Tax Act, 2003, rather than seeking relief through the writ petition.