2024 (11) TMI 118 - HC - VAT / Sales Tax

Non-refund of the excess tax amount paid by the petitioner for different assessment years - rejection of refund claim on the ground of time limitation - HELD THAT - It is evident that the Rule 29 clearly prescribes the period before which the refund claims are required to be filed. However, proviso to Rule 29 (1) (a) empowers the prescribed authority to admit an application for refund beyond the period prescribed, namely, 180 days from the date of assessment or reassessment, if the authority is satisfied that the sufficient cause has been made out to justify the delay for not making the application within the said period. From a perusal of the impugned orders it is evident that the refund applications were rejected on the ground that these were time barred. Impugned orders do not reflect that the petitioner was given any notice to explain the cause of delay. The affidavit-in-opposition filed by the respondents also does not explain the position as to whether the petitioner was put to notice and given an opportunity to explain the reasons for the delay in filing the refund applications prior to issuance of the impugned orders. There is no dispute also that claims for refund sought for by the petitioner is also not disputed by the respondent Department denying the claims that the petitioner is otherwise not entitled under the law to claims the refund. The notices issued for the proceedings that the assessment by the Department which are referred to in the writ petitions are also not disputed by the Department. Under such circumstances, it is evident that the Department did initiate a proceeding for assessment which, however, was not carried out for the reasons best known to the Department. The impugned orders dated 16.11.2016, 15.09.2016 and 07.01.2017, therefore, are set aside. The matter is remanded back to the concerned respondent(s)/prescribed authority and this Court permits the asessee to explain the causes of delay that may have occurred in filing the refund application - Petition allowed by way of remand.

Issues Involved:
1. Non-refund of excess tax paid by the petitioner for various assessment years.
2. Rejection of refund applications as time-barred under the Assam Value Added Tax Act, 2003 and Rules, 2005.
3. Lack of communication and opportunity for the petitioner to explain the delay in filing refund applications.
4. Legal entitlement to refunds and interest on excess tax paid.

Issue-wise Detailed Analysis:

1. Non-refund of excess tax paid by the petitioner:
The petitioner, a public limited company, filed writ petitions challenging the non-refund of excess tax paid for assessment years 2006-07, 2007-08, 2009-10, and 2010-11. The petitioner claimed that excess tax was paid due to tax deducted at source by VAT authorities. Despite filing returns and refund applications, the petitioner did not receive refunds, prompting legal action.

2. Rejection of refund applications as time-barred:
The refund applications were rejected by the tax authorities on the grounds of being time-barred under the Assam Value Added Tax Act, 2003, and the Assam Value Added Tax Rules, 2005. The authorities cited Rule 29, which requires refund applications to be filed within 180 days from the date of assessment or reassessment. The petitioner argued that the delay was due to the department's failure to communicate the status of assessment proceedings.

3. Lack of communication and opportunity for the petitioner to explain the delay:
The petitioner contended that the department failed to issue any communication or orders regarding the assessment proceedings, despite the petitioner responding to notices and submitting necessary documents. The petitioner argued that the lack of communication led to the delay in filing refund applications. The court noted that the impugned orders did not reflect any notice given to the petitioner to explain the delay, and the respondents' affidavit did not address whether the petitioner was afforded such an opportunity.

4. Legal entitlement to refunds and interest on excess tax paid:
The petitioner asserted that there was no dispute regarding their entitlement to a refund of excess tax paid. The court emphasized that tax is a compulsory exaction by the state and that refunds should not be withheld on technical grounds without allowing the petitioner to explain the delay. The court referred to previous judgments, including those by the Supreme Court, which highlighted the importance of providing remedies for erroneous levies and ensuring social justice.

Conclusion:
The court set aside the impugned orders rejecting the refund applications and remanded the matter back to the concerned authorities. The petitioner was permitted to explain the causes of delay in filing the refund applications. The authorities were directed to consider these explanations and process the refund applications if the petitioner was found to have paid excess tax. The entire process was to be completed within 60 days from the receipt of the condonation of delay application and a certified copy of the court's order. The writ petitions were allowed with these directions.

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