2015 (5) TMI 169 - HC - VAT and Sales Tax

Clim of interest with Refund claim - Excess tax paid - Tribunal deleted the levy of tax imposed by the respondent on parts and accessories of hearing aids and accessories effected under both KVAT Act and CST Act as well as the tax levied on the admitted interstate sales of hearing equipments under the CST Act - Held that - It appears, till the re-assessment order reached finality, the amount is said to be in the custody of the State/respondent. Be that as it may, it is not that the amount is withheld deliberately for some other reason. The Karnataka Appellate Tribunal ultimately determined the amount holding that the tax levied on the admitted interstate sales of hearing equipments under KVAT Act is to be deleted as the same turnover is levied with CST under the CST Act. In that process, the amount so collected becomes excess and the same has to be refunded. In this regard, seeking for payment of interest may not be appropriate. - since from last five years, the amount is lying with the respondent. It appears, the act of the respondent is not deliberate, in the sense, while considering the case of the petitioner, considerable time has been taken and for that State is not responsible to pay interest. - Writ Petitions are disposed of with a direction to the petitioner to collect the cheque which is kept ready by the Government with respect to refund of the excess amount which was remitted to the government by the petitioner.

Summary

Issues:
1. Refund of excess tax along with interest sought by the petitioner.
2. Dismissal of the Sales Tax Revision Petition by the High Court.
3. Dispute over the payment of interest on the refunded amount.

Analysis:
1. The petitioner, a registered dealer under the KVAT Act and CST Act, sought a writ of mandamus for the refund of excess tax paid along with interest. The re-assessment proceedings for certain assessment years were concluded by the Deputy Commissioner, and the appeal against the assessment orders was dismissed by the Joint Commissioner. The Karnataka Appellate Tribunal allowed the appeals by deleting the levy of tax imposed by the respondent on specific items. The High Court, in an order dated 9th June 2014, upheld the Tribunal's decision. The petitioner requested the refund of excess tax but was yet to receive it, leading to the filing of the present petitions.

2. The learned Addl. Government Advocate informed the court that the refund amount was ready for collection by the petitioner. However, the petitioner argued that interest should also be paid on the refunded amount. The court noted that the tax amount collected became excess due to the Tribunal's decision, and the State was not deliberately withholding the refund. The court opined that seeking interest on the refunded amount might not be appropriate in this case.

3. The petitioner's counsel highlighted that the amount had been with the respondent for five years. The court acknowledged that the delay in refund was not deliberate and was due to the time taken in considering the petitioner's case. Therefore, the court disposed of the Writ Petitions, directing the petitioner to collect the refund cheque kept ready by the Government without any additional interest payment.