2023 (2) TMI 367 - HC - VAT and Sales Tax

Maintainability of petition - refund of the excess tax collected - concessional rate of tax filing of Form C declaration - HELD THAT - The writ petitioner/purchasing dealer has locus standi to maintain the claim for refund of the excess tax collected directly to them and the writ petition is maintainable - To be entitled to concessional rate of tax filing of Form C declaration is mandatory. However, the time limit prescribed for filing such declarations is directory and not mandatory and in the case on hand the assessing officer having accepted the Form C declarations and considered the same, it is deemed that the assessing officer of IOCL was satisfied that there was sufficient cause which prevented the dealer from filing Form C declaration within the time stipulated under the Act and the rules framed thereunder. Having held that the rejection of the Form C declarations was erroneous, unsustainable and illegal - the writ petitioner is entitled to the concession rate of tax as they have fulfilled the conditions in Section 8 of the Central Sales Tax Act, 1956 and the Form C declarations having been verified and found to be in order by the concerned authority of the State of West Bengal. Thus, the writ petitioners are entitled to claim refund of tax directly from the State of West Bengal and they are not required to make the claim through the selling dealer, IOCL. The order and directions issued by the learned Single Bench stands affirmed and the appellants/State of West Bengal is directed to effect the refund of the excess tax collected directly to the writ petitioner within 45 days from the date of receipt of the server copy of this order together with interest at the statutory rate as stipulated under the WBST Act, from 01.07.2020 that is the day after the date on which the assessment order in the case of IOCL was passed that is 30.06.2020 till the date on which refund is effected. If there is any discrepancy in the date, it is clarified that interest shall be payable from the next day after the date of the assessment order till the date of payment.

Summary

Issues:
1. Locus standi of writ petitioner for refund of excess tax directly.
2. Mandatory nature of Form "C" declaration for concessional tax rate.
3. Rejection of Form "C" declarations and assessment order validity.
4. Entitlement of writ petitioner to concessional tax rate.
5. Claiming refund directly from the State of West Bengal.
6. Refund denial under compelling circumstances.
7. Claiming refund from the State of West Bengal.
8. Justification of State of West Bengal in refusing refund.
9. Binding circular of Union of India on State of West Bengal.

Analysis:

Issue 1: Locus standi of writ petitioner for refund of excess tax directly
The court held that the writ petitioner, a purchasing dealer, has the standing to claim a refund of excess tax directly, making the writ petition maintainable.

Issue 2: Mandatory nature of Form "C" declaration for concessional tax rate
While filing Form "C" declaration is mandatory for concessional tax rate, the court deemed the time limit for filing as directory, not mandatory. The assessing officer's acceptance of delayed declarations indicated satisfaction with reasons for delay.

Issue 3: Rejection of Form "C" declarations and assessment order validity
The court found the rejection of Form "C" declarations erroneous, unsustainable, and illegal, leading to setting aside the assessment order to that extent.

Issue 4: Entitlement of writ petitioner to concessional tax rate
The writ petitioner was deemed entitled to the concessional tax rate as they fulfilled conditions under the Central Sales Tax Act, with verified Form "C" declarations.

Issue 5: Claiming refund directly from the State of West Bengal
The court ruled in favor of the writ petitioners, allowing them to claim a refund directly from the State of West Bengal without involving the selling dealer, IOCL.

Issue 6: Refund denial under compelling circumstances
Refusing refund due to non-issuance of Form "C" declarations under compelling circumstances was deemed unjustified by the court.

Issue 7: Claiming refund from the State of West Bengal
The writ petitioners were held eligible to claim a refund directly from the State of West Bengal, considering the tax burden borne by them.

Issue 8: Justification of State of West Bengal in refusing refund
The State of West Bengal was found unjustified in denying the refund, especially since they had allowed concessional rates to the writ petitioners previously.

Issue 9: Binding circular of Union of India on State of West Bengal
The circular issued by the Union of India was considered binding on the State of West Bengal, emphasizing the obligation to refund excess tax collected.

The court affirmed the order directing the State of West Bengal to refund the excess tax directly to the writ petitioners within a specified timeline, along with interest as per statutory rates.