2021 (10) TMI 379 - HC - VAT and Sales Tax

Refund of sales tax - sales exempt under MVAT or not - order refusing refund was never served on the petitioner - no delay in filing the petition - HELD THAT - The roznama records that as the dealer is not available at the place of business and not responding for the last 2 years, the case is closed for rejection. It is stated that many opportunities were given but the dealer was not available at the place of business and there was no response and hence application was rejected. The roznama dated March 25, 2014 records that the application made by the dealer for the year 2009-2010 is rejected on September 20, 2012 and served on September 26, 2012 by pasting. Hence, assessment/audit is not done in the case. The right to seek the refund having been crystalised on September 30, 2011 and in any case as the order rejecting refund is passed on September 20, 2012, it was expected that the petitioner approaches this Court as early as possible and without undue delay. The petitioner slept over its rights - Among the several matters which the High Courts rightly take into consideration in the exercise of that discretion is the delay made by the aggrieved party in seeking this special remedy and what excuse there is for it. Their Lordships thus held that as a general rule that if there has been unreasonable delay the court ought not ordinarily to lend its aid to a party by the extraordinary remedy of mandamus. Their Lordships then considered the following submission made by learned counsel that assuming that the remedy of recovery by action in a civil court stood barred on the date these applications were made that would be no reason to refuse relief under Article 226 of the Constitution . Not only, it is found that a stale claim is sought to be agitated by way of this writ petition but the petitioner also raises disputed questions of fact regarding service of the order rejecting the refund - the delay in moving the writ petition is unreasonable - petition dismissed.

Issues Involved:
1. Delay and laches in filing the writ petition.
2. Service of the refund rejection order.
3. Compliance with Section 18 of the Maharashtra Value Added Tax Act, 2002.
4. Right to claim refund and cause of action.
5. Discretionary power of the court under Article 226 of the Constitution of India.

Detailed Analysis:

1. Delay and Laches in Filing the Writ Petition:
The court examined whether the petition suffered from delay and laches. The petitioner argued that the delay was justified as the refund rejection order was never served. However, the respondent contended that the claim was belated and stale, as the right to claim refund crystallized on September 30, 2011, and the rejection order was issued on September 20, 2012. The court found that the petitioner did not approach the court promptly and allowed the remedy to be lost over time. The court cited precedents, including the Supreme Court's decision in Union of India vs. M.K. Sarkar, emphasizing that belated representations do not furnish a fresh cause of action.

2. Service of the Refund Rejection Order:
The petitioner contended that no notice for assessment or rejection order was served. The respondent stated that the rejection order was issued online and served by pasting at the business place as the petitioner was not found. The court noted that the petitioner failed to comply with Section 18 of the Maharashtra Value Added Tax Act, 2002, which requires informing the prescribed authority about changes in business ownership or name. The court found no substance in the petitioner's claim that the cause of action survived due to non-service of the order.

3. Compliance with Section 18 of the Maharashtra Value Added Tax Act, 2002:
The court highlighted the petitioner's failure to comply with Section 18, which mandates informing the authority about changes in business ownership or name. The court noted that the petitioner's business was taken over by a new management, and there was no evidence of compliance with Section 18. This non-compliance weakened the petitioner's argument regarding the non-service of the rejection order.

4. Right to Claim Refund and Cause of Action:
The petitioner claimed that the right to refund crystallized on September 30, 2011, and the rejection order was not served. The court found that the right to seek refund crystallized on September 30, 2011, and the rejection order was dated September 20, 2012. The court held that the petitioner's attempt to resurrect the cause of action through applications under the Right to Information Act was not valid. The court cited the Supreme Court's decision in Bhailal Bhai's case, stating that unreasonable delay in seeking remedy under Article 226 warrants dismissal.

5. Discretionary Power of the Court under Article 226 of the Constitution of India:
The court emphasized that the power to grant relief under Article 226 is discretionary. The court referred to the Supreme Court's decision in Bhailal Bhai's case, which held that delay in seeking remedy under Article 226 should be measured against the limitation period for civil actions. The court found that the delay in filing the writ petition was unreasonable and that the petitioner did not exercise due diligence. The court also noted that disputed questions of fact regarding the service of the rejection order further justified dismissal.

Conclusion:
The court dismissed the writ petition due to unreasonable delay and laches, non-compliance with statutory requirements, and the petitioner's failure to exercise due diligence. The court held that the petitioner's claim was stale and that the discretionary power under Article 226 should not be exercised in favor of the petitioner. The petition was dismissed with no costs.

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