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2021 (2) TMI 972 - HC - VAT and Sales TaxMaintainability of refund claim - Realization of the amount without authority of law - rejection of claim holding that in absence of any statutory provision under JVAT Act the learned JCCT had no jurisdiction to allow the refund application of the petitioner - HELD THAT - It is the case of the petitioner, undisputed by the respondent that petitioner is not a registered dealer under JVAT Act, 2005 nor has been assessed to tax under the Act. No demand notices were raised against the petitioner as such to the effect that any tax is due against him. Petitioner claims to have made deposit of ₹ 61,74, 899/- in order to ensure continuity of business and to avoid coercive action without any demand of tax since the goods transported by the petitioner were already excisable to Central Sales Tax to the tune of ₹ 58,05,157/- which were paid in the State of Origin. No sale took place in the State of Jharkhand within that period - The principles regarding maintainability of writ petition seeking refund in case the levy is unauthorized or without jurisdiction or is unconstitutional is well settled by the decisions of the Apex Court. In the case of HMM LTD. VERSUS ADMINISTRATOR, BANGALORE CITY CORPORATION 1989 (10) TMI 180 - SUPREME COURT , the Apex Court has held that realization of tax or money without the authority of law is bad under Article 265 of the Constitution of India. The claim of refund has been denied on the plea that there is no provision under the JVAT Act since the petitioner is not a registered dealer and no assessment proceedings have been held. Under the Scheme of JVAT Act, assessment proceedings can be held against dealers, who have failed to get themselves registered. However, no assessment can be made under Sections 37 or 38 after expiry of 5 years from the end of the tax period, to which the assessment relates. On the face of the pleadings on record and the stand of the respondents brought through their counter affidavit, the rejection of claim for refund only on the ground that there is no provisions under the JVAT Act, 2005 for entertaining such a claim is not sustainable in law. Whether the contention of the petitioner that the entire sale transaction originated in a different State after payment of central sales tax to the tune of ₹ 58,05,157/- and there was no sale transaction originating within the State of Jharkhand for the respondent to retain the amount so deposited is a matter of verification upon assessment. The order of rejection of claim of refund by respondent no. 3 dated 1st September, 2016 (Annexure-4) and the order of learned Commercial Taxes Tribunal dated 31st October, 2017 (Annexure-8) upholding the same cannot be sustained in the eye of law Accordingly, they are set aside. The matter is remitted to the respondent no. 3, Joint Commissioner of Commercial Taxes (Admin), Ranchi to consider the claim of refund of the petitioner in accordance with law within a period of six weeks from today. Petitioner should appear before the respondent no. 3 on 15th February, 2021 with the relevant records. Petition allowed - decided in favor of petitioner.
Issues:
Refund claim under JVAT Act for unregistered dealer. Analysis: The petitioner deposited a sum under the JVAT Act between December 2014 to August 2015, seeking a refund of ?61,74,899. The claim was rejected on the grounds of non-maintainability as the petitioner was unregistered. The Tribunal upheld the rejection citing lack of statutory provision for refund to unregistered dealers. The petitioner, engaged in selling goods online and providing logistics services, argued that the deposit was made without any tax liability or assessment, and filed for refund under Section 52 of the Act to avoid coercive action. The petitioner contended that retention of the amount without tax liability violated Article 265 of the Constitution and sought a writ for refund based on legal precedents. The petitioner also highlighted that no sales originated from Jharkhand, negating unjust enrichment concerns. The High Court considered the petitioner's submissions and noted the absence of tax assessment or demand notices against the petitioner. The Court referred to legal precedents indicating that realization of tax without legal authority is unconstitutional. The Court emphasized that the denial of refund solely based on the petitioner's unregistered status was legally unsustainable. The Court directed the concerned authority to reevaluate the refund claim within six weeks, considering the petitioner's contentions and the provisions of the JVAT Act. The Court clarified that its observations should not prejudice either party during the refund assessment process. In conclusion, the High Court allowed the writ petition, setting aside the previous rejection of the refund claim and remitting the matter for reconsideration in accordance with the law. The Court emphasized the need for a fair assessment of the refund claim based on the legal provisions and factual circumstances, ensuring that the petitioner's rights are upheld without prejudice to the respondent's position.
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