2016 (7) TMI 221 - HC - VAT and Sales Tax

Release (refund) of pre-deposit amount as per the direction of the tribunal - unjust enrichment - The Government filed rectification application No.6/2014 seeking recall of the order on the ground that the same was passed on an apparent error. This application came to be dismissed by the Tribunal by an order dated 21.2.2014. This is how the Government has challenged the said three orders passed by the Tribunal on 27.2.2009, 9.1.2014 and 21.2.2014. Held that - neither the question of unjust enrichment formed part of the discussion in the original order of the Tribunal nor the Tribunal s order dated 27.2.2009 contained any directions for refund. It was thereafter, not open for the Tribunal to give consequential directions in separate Misc. proceedings taken out by the parties five years after the order was passed by the Tribunal. For such reasons, the orders dated 9.1.2014 and 21.2.2014. are set aside. In the meantime, respondent assessee has already received the refund. Under what circumstances, the refund was released is not known to us and is not necessary for us to go into. We merely take note of the submissions made by the counsel for the respondent. - Petitions disposed of.

Summary

Issues:
Challenge to orders passed by the Tribunal on 27.2.2009, 9.1.2014, and 21.2.2014.

Analysis:
The petition filed by the State Government sought to quash orders passed by the Gujarat Value Added Tax Tribunal on various dates. The Tribunal had partially allowed the petition of the assessee, setting aside the tax imposition on the sale of Pan Masala with tobacco. Subsequently, the Tribunal directed the department to release the refund to the assessee. The Government challenged these orders, citing delay and laches in questioning the order dated 27.2.2009. The High Court found the challenge to the 2009 order barred by delay, with no valid grounds presented for the delay of nearly six years in filing the petition. However, serious doubts were raised regarding the Tribunal's authority to direct payment of refund in its subsequent orders dated 9.1.2014 and 21.2.2014. The Court noted the absence of statutory provisions empowering the Tribunal to implement its own orders or direct refunds, especially without considering aspects like unjust enrichment. The Tribunal's discussion on unjust enrichment in the later orders was deemed inappropriate as it did not form part of the original order and lacked directions for refund.

The High Court emphasized that the Tribunal exceeded its authority by giving consequential directions in separate miscellaneous proceedings initiated years after the original order was passed. The Court set aside the orders dated 9.1.2014 and 21.2.2014 on these grounds. Although the respondent assessee had already received the refund, the circumstances of the refund release were not explored further as it was deemed unnecessary for the Court's decision. The Court disposed of the petition accordingly, highlighting the importance of adhering to legal procedures and statutory provisions in such matters.