2022 (12) TMI 1045 - HC - VAT and Sales Tax

Refund the amount of excess tax paid by the appellant - HELD THAT - It would have been well open to the writ Court to grant permission to the appellant to withdraw the proceedings before the Tribunal by making necessary submission in the writ petition. In any event, there is nothing on record to point out that there was an order of assessment under both the enactments, which had culminated in a demand. There is also nothing placed on record before the Tribunal or before this Court to show that the demand was pending prior to the issuance of the refund order in Form 27 or subsequent to the said order. The respondents are not justified in linking both the proceedings. After the issuance of Form 27 in which it has been clearly recorded that the appellant had paid excess tax, it is the duty of the department to refund the said amount and if the amount is not refunded within time, the appellant / assessee would be entitled to interest on the same as the department seeks to recover alleged tax dues with interest. The same principle will equally apply to the department as well when they have withheld the refund though Form 27 was issued as early as on 4th August, 2016. The sanction and payment of the excess tax collected is an independent proceedings to the proceedings that the department may initiate for any alleged tax dues either under the provisions of the WBVAT Act or under the CST Act. Appeal allowed.

Summary

Issues:
1. Refund of excess tax paid by the appellant.
2. Jurisdiction of the High Court under Article 226 of the Constitution of India.
3. Maintaining parallel remedies before the Tribunal and High Court.

Issue 1: Refund of Excess Tax:
The appellant filed a writ petition seeking a direction for the refund of excess tax paid, as acknowledged by the department in Form-27. The Tribunal was approached by the appellant, but due to its non-functionality, the matter was not resolved. The High Court held that the appellant was entitled to approach under Article 226 of the Constitution of India. The Court disagreed with the Single Bench's decision that withdrawal from the Tribunal was necessary before pursuing the writ petition, emphasizing the lack of functionality of the Tribunal and absence of a final decision. The Court directed the respondents to refund the excess tax amount with statutory interest from August 2016.

Issue 2: Jurisdiction under Article 226:
The High Court asserted its jurisdiction under Article 226 of the Constitution of India, allowing the appellant to seek relief for the refund of excess tax. The Court highlighted the inability of the Tribunal to function due to lack of quorum, providing a basis for the appellant to approach the High Court for redressal. The Court's decision emphasized the importance of ensuring justice and timely resolution for the appellant and similarly situated assessees.

Issue 3: Parallel Remedies Before Tribunal and High Court:
The Court addressed the concern of invoking parallel remedies by maintaining proceedings before the Tribunal and filing a writ petition simultaneously. The Single Bench's dismissal of the writ petition on this ground was overturned by the High Court, citing the Tribunal's non-functionality and lack of a final decision. The Court emphasized that the appellant could not withdraw proceedings before the non-functional Tribunal and that the refund process was independent of any alleged tax dues under other enactments. The Court allowed the writ petition, directing the refund of the excess tax amount and statutory interest, while permitting the department to pursue any alleged tax dues separately in accordance with the law.

In conclusion, the High Court's judgment addressed the issues of refunding excess tax, jurisdiction under Article 226, and the permissibility of maintaining parallel remedies before the Tribunal and High Court. The Court upheld the appellant's right to seek relief through the writ petition, emphasizing the department's duty to refund the excess tax amount with statutory interest. The decision provided clarity on the appellant's entitlement to approach the High Court due to the Tribunal's non-functionality and underscored the importance of timely resolution and justice in tax matters.