2022 (12) TMI 900 - HC - VAT and Sales Tax

Refund claim - export of goods - excess carried forward in the annual return - period of limitation for filing appeal against the order of the Assessing Authority also stood expired - HELD THAT - As per scheme of the provisions of the '2003 Act' as also the Haryana Value Added Tax Rules, 2003 governing refund it would be open for the Assessing Authority at the stage of assessment to ascertain if a dealer has paid any amount in excess of tax, interest on penalty assessed or imposed on him, allow refund of the excess amount or allow the same to be carried forward for adjustment with future tax liability - Aforesaid is the mandate of Section 20(4) of the '2003 Act'. Under Rule 41(4) of the Haryana Value Added Tax Rules, 2003 it is again at the stage of framing the assessment, if the Assessing Authority finds that the sum of tax paid and input tax exceeds the sum of output tax and purchase tax, it shall determine the excess amount and from the excess amount it shall then deduct any amount due from the dealer whether under the '2003 Act' itself or the Central Act and then allow from the balance amount refund of the amount. In the facts of the present case the positive stand taken on behalf of the department is that the dealer had claimed excess carried forward in the annual return filed in Form VAT R-2. The Assessing Authority allowed the same in terms of assessment order dated 30.03.2018 (Annexure P-1). It is not even the case projected on behalf of the petitioner that a refund had been claimed at the stage of filing of the annual return. To the contrary, the pleaded case of the petitioner itself is that after passing of the assessment order dated 30.03.2018 (Annexure P-1), the application seeking refund had been made on 14.06.2018 (Annexure P-2) i.e. subsequent in point of time. In this regard it is observed that under Rule 42 of the Haryana Value Added Tax Rules, 2003 the case for refund is to be forwarded to a Committee within a stipulated time frame only in a situation when a refund has been allowed in the assessment order. In the facts of the present case no refund was allowed as the petitioner had not claimed the same in the annual return filed in Form VAT R-2. Rather the petitioner had claimed excess carried forward in his annual return and the same was allowed. There was no occasion for Rule 42 to come into operation in such facts and circumstances. There are no patent infirmity or illegality in the impugned order dated 27.10.2020 - Petition is dismissed.

Summary

Issues Involved:
1. Legality of the rejection of the refund application.
2. Compliance with the Haryana Value Added Tax Act, 2003 and Rules.
3. Jurisdiction of the Assessing Authority.
4. Availability and exhaustion of statutory remedies.

Detailed Analysis:

1. Legality of the Rejection of the Refund Application:
The petitioner challenged the order dated 27.10.2020, which rejected their refund application for the assessment year 2014-15. The petitioner argued that the order was arbitrary and contrary to the provisions of the Haryana Value Added Tax Act, 2003 (hereinafter referred to as the '2003 Act') and the Rules framed thereunder. They contended that the excess amount of Rs. 1,50,92,451/- should have been refunded instead of being carried forward, as the petitioner is an export unit with 90% of goods exported.

2. Compliance with the Haryana Value Added Tax Act, 2003 and Rules:
The court examined Section 20 of the '2003 Act' and Rules 41 and 42 of the Haryana Value Added Tax Rules, 2003. As per these provisions, the Assessing Authority can allow a refund or carry forward the excess amount for future tax liability at the stage of assessment. The petitioner had claimed excess carried forward in their annual return filed in Form VAT R-2, which was allowed in the assessment order dated 30.03.2018. The court noted that the petitioner did not claim a refund at the stage of filing the annual return but only did so after the assessment order was passed.

3. Jurisdiction of the Assessing Authority:
The petitioner argued that the Assessing Authority lacked jurisdiction to decide on the refund application, as per Rule 42, which mandates that refunds exceeding Rs. 10 lakhs should be decided by a committee. However, the court clarified that Rule 42 applies only when a refund has been allowed in the assessment order. In this case, since no refund was claimed in the annual return, the assessment order allowed the excess amount to be carried forward, and thus, Rule 42 did not come into operation.

4. Availability and Exhaustion of Statutory Remedies:
The court emphasized that if the petitioner was aggrieved by the assessment order for not allowing a refund, they should have availed the statutory remedy of appeal under Section 33(5) of the '2003 Act'. The petitioner did not pursue this remedy and instead filed the writ petition to cover up the delay. The court found that the assessment order could not be changed or altered by the Assessing Authority once passed.

Conclusion:
The court upheld the impugned order dated 27.10.2020, finding it valid and in compliance with the relevant provisions of the '2003 Act' and the Rules framed thereunder. The petition was dismissed, and no merit was found in the petitioner's arguments.