2024 (7) TMI 615 - HC - VAT and Sales Tax

Refund of cash deposit - seeking release of seized vehicle and goods - HELD THAT - Since, there appears to be certain doubts as regards what was paid by the respondent at the first instance and what was deposited, we are of the view that the matter should be re-examined by the learned Tribunal. However, it is made clear that the amount of Rs. 18,00,000/- was only by way of a security deposit and a pre-condition for release of the seized articles. Therefore, the revenue cannot take a stand that a sum of Rs. 10,00,000/-, which was made as a cash deposit out of Rs. 18,00,000/- is a payment. The matter is remanded back to the learned Tribunal to consider the aspect with regard to the payment of penalty, whether the same would be also covered under the SOD and other related matters - Petition disposed off by way of remand.

Summary

Issues:
Challenge to order passed by West Bengal Taxation Tribunal regarding refund of cash deposit and adjustment of disputed tax.

Analysis:
The State filed a writ petition challenging the order of the West Bengal Taxation Tribunal dated 18th March, 2024, which directed the release of seized goods upon depositing security. The respondent subsequently sought a refund of Rs. 10,00,000/-, which was paid as a cash deposit. The Tribunal agreed to refund Rs. 5,86,720/- after adjusting Rs. 4,13,280/- from the deposit. The State contended that the deposit had lost its character, and adjustment was not valid. However, the Court disagreed, stating that the order clearly indicated a security deposit to secure revenue interests. The Court noted discrepancies in penalty payment information and remanded the matter to the Tribunal for further examination, clarifying that the cash deposit was part of the security deposit and not a payment. The impugned order was set aside for reconsideration of penalty payment and related issues.

This judgment highlights the distinction between a deposit and a payment, emphasizing the intention behind the Tribunal's order for a security deposit. The Court's decision to remand the matter for clarification on penalty payment and adherence to Settlement of Disputes guidelines underscores the importance of proper documentation and representation before the Tribunal. The ruling ensures a fair assessment of the disputed tax and upholds the purpose of security deposits in revenue matters.