2015 (10) TMI 972 - HC - VAT and Sales Tax

Denial of refund claim - Approval of partial refund - Held that - State submitted that in so far as Annexure P.12 is concerned, whereby rectification order dated 6.11.2013 has been passed creating liability against the petitioner, has been withdrawn. She further stated that the amount shall be refunded to the petitioner within 15 days from the date of receipt of a certified copy of this order. She, however, prayed that the State be allowed to take proceedings under Section 17 for reassessment or under Section 34 of the Haryana VAT Act for revision of the assessment order. - Petition disposed of.

Summary

Issues:
Petition to quash rectification order and seek refund under Article 226 of the Constitution of India.

Analysis:
The petitioner, a registered dealer under the Haryana Value Added Tax Act and the Central Sales Tax Act, filed a petition seeking to quash a rectification order dated 6.11.2013 and requesting a refund of Rs. 23,50,246/- as per the assessment order dated 29.3.2013. The petitioner, a works contractor, undertook various contracts and acted as a sub-contractor for a construction company. The assessing authority found the petitioner entitled to a refund after verifying TDS payments made by the contractor and contractees. However, during the approval proceedings, certain issues were raised regarding deductions and tax rates applied in one of the contracts. The DETC raised objections, leading to a notice for rectification of the assessment order. The petitioner argued that rectification under the Haryana VAT Act could only be for clerical and arithmetic mistakes and not for substantive issues. Despite the petitioner's responses, the assessing authority proceeded to rectify the assessment order, resulting in a demand of Rs. 31,50,428/-, including interest of Rs. 14,52,204/-.

In response to the petition, the State informed the court that the rectification order creating liability against the petitioner had been withdrawn, and the amount would be refunded within 15 days. The State requested permission to initiate proceedings for reassessment or revision of the assessment order under relevant provisions of the Haryana VAT Act. Consequently, the court disposed of the writ petition, directing the respondents to refund the amount due to the petitioner within 15 days and allowing the State to take further proceedings for reassessment or revision in accordance with the law.

This judgment highlights the importance of procedural fairness and adherence to statutory provisions in tax assessment matters. It underscores the role of the court in ensuring that taxpayers are not unduly burdened by incorrect or unjust rectification orders, while also recognizing the State's authority to initiate appropriate proceedings for reassessment or revision as per the law.