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TMI Blog2005 (8) TMI 624X X X X Extracts X X X X X X X X Extracts X X X X ..... o April 30, 1984 and from May 1, 1983 to April 30, 1984 found that the pipes manufactured and sold by them, i.e., Finolex Pipes Pvt. Ltd., were taxable only at the rate of 2 per cent being goods covered by entry C-I-18 read with entry No. 117 of the notification issued under section 41 of the BST Act as such excess amount of tax at 6 per cent collected was liable to be forfeited. Accordingly, excess collection of sales tax made by M/s. Finolex Pipes Ltd. at 6 per cent was forfeited. 3.. The provisions of the BST Act create right in favour of the assessee (who has paid excess amount of tax) to claim refund of the amount forfeited by the Sales Tax Department since that amount Oral. belongs to him. The applicants-assessees herein, thus, filed applications under section 38(6) of the BST Act to claim refund of the amount before the Assistant Commissioner of Sales Tax (Assessment)-I, Pune Division ("Assistant Commissioner", for short), under whose jurisdiction M/s. Finolex Plastics Pvt. Ltd. are registered as dealers. 4.. The fate of the above applications was never communicated to them by the department. The applicant finding no response from the Assistant Commissioner approached the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in contravention of section 46 is forfeited to the State Government under section 37 and is recovered from him, such payment or recovery shall discharge him of the liability to refund the said sum to the person from whom it was so collected. In turn, the assessee or dealer, who has paid excess sum or part thereof, can very well claim it by way of refund from the State Government, provided an application for such refund or claim is made by him in writing in the prescribed form to the Commissioner, within one year from the date of the order of forfeiture. The word "prescribed", as has been defined under section 2(21) of the BST Act, unless the context otherwise requires, means "prescribed by rules". In exercise of powers conferred under the provisions of the BST Act, the State Government has framed Rules known as "Bombay Sales Tax Rules, 1959" ("the BST Rules", for short). Rule 52-C thereof provides for making application for refund under sub-section (6) of section 38 in form 35-B. The opening part of the said form reads as under: "[Form 35-B] (See rule 52-C of the Bombay Sales Tax Rules, 1959) Application for refund under sub-section (6) of section 38 To The Sales Tax Officer, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the order of forfeiture, so as to set up claim for refund of excess tax paid by him. Mr. Surte, thus, submits that it is necessary to interpret the provisions granting refund under the Act and Rules in a reasonable manner so as to make the provision workable. The workable interpretation will also avoid hardship to the assessees or the persons like the present applicants. 10.. Mr. Surte, in order to establish his point, cited the very case on hand by way of illustration. Taking the facts of this case, he pointed out that the applicants were not party to the assessment proceedings relating to M/s. Finolex Pipes Pvt. Ltd., as they are registered as dealer with the S.T.O., Jalgaon since their place of business is at Jalgaon. In the circumstances, there was no chance for these applicants to know the contents of the orders of assessment or the orders passed in appeal preferred by M/s. Finolex Pipes Pvt. Ltd., and/or consequent orders of forfeiture passed by the appellate authority in their appeals. Since the applicants were not party to the appeals, the orders passed by the appellate authority were not communicated to them. The applicants, only after getting knowledge of the orders o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the expression "the date of the order" needs to be construed as from the date of communication of the order so as to avoid hardship and to make the provision workable. 16.. Mr. Surte, so far as the third question is concerned, submits that the applicant had preferred application to the Assistant Commissioner on the assumption that he was empowered to pass the order of refund. However, if the Assistant Commissioner felt that he had no jurisdiction to grant order of refund, then the said application ought to have been forwarded by him to the authority having jurisdiction to entertain such application but in no circumstance, it could have been rejected by him. If he had no authority to consider the application, then he had no authority or jurisdiction to reject it. 17.. Mr. Surte, thus, at the cost of repetition, submitted that it would be reasonable to lay down workable procedure for refund which is absent in the Act and Rules. Per contra: 18.. At the outset, Mrs. Kajle, learned Additional Government Pleader appearing for the Revenue, raised a preliminary objection to the maintainability of this reference. In her submission, appeal before the Sales Tax Tribunal was preferred agai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceipt of any such application, the Commissioner has to hold an inquiry as he deems fit, and if the Commissioner is satisfied that the claim is valid and admissible and that the amount so claimed as refund was actually paid in Government treasury or recovered, and no drawback, set-off, refund or remission in respect of that amount was granted, then he has to refund that sum or part thereof found to be due and payable to the person concerned. It is, thus, urged that the period of limitation runs from the date of the order of forfeiture and not from the date of its knowledge or communication. 21.. So far as third question is concerned, in reply, learned Additional Government Pleader submits that the said question having become academic, it need not be answered. Statutory provisions: 22.. Before considering the rival contentions, it would be useful to refer to the statutory provisions having impact on the questions involved. Section 20(5) and section 37(2) and (3) and section 38(6) of the BST Act as it stood in the relevant period read as under: "20. Sales tax authorities.--(1) to (4)............................................. (5) A Deputy Commissioner shall save as otherwise di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fund under sub-section (6) of section 38.--An application for refund under sub-section (6) of section 38 shall be made in form 35-B." Consideration: 23.. Having heard rival parties; having examined the statutory provisions and the scheme of the BST Act referred to hereinabove, it is clear that any sum collected by a person by way of tax in contravention of section 46, is required to be forfeited to the State Government under section 37(2) of the BST Act and is required to be recovered from him, such payment or recovery gives him discharge from the liability to refund the said sum to the persons from whom it was so collected. However, it is not open for the State to retain the amount so forfeited. The refund of such sum or any part thereof can be claimed from the Government by the person from whom it was realised by way of tax, provided such claim is made by him in a prescribed form to the Commissioner within one year from the date of the order of forfeiture. On receipt of any such application, the Commissioner has to hold enquiry as he deems fit, and, has to be satisfied that the claim made is valid and admissible and the amount so claimed as refund was actually paid in Governmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... islative intent appears that every claim for refund under section 38(6) is expected to be first moved to the S.T.O., who has assessed and recovered sales tax from the applicant. The S.T.O., after receipt of the application, is expected to forward it to the Commissioner as contemplated under sub-section (6) of section 38 of the BST Act with his remarks along with necessary documents. Then, after receipt of refund application with remarks of the S.T.O., the duty of the Commissioner starts. He is obliged to conduct enquiry as he deems fit and pass an order either granting or refusing to grant refund. Thereafter, he is expected to remit that order to the S.T.O., who in turn, is expected to communicate that order to the applicant, if it is adverse to him. If it is an order granting refund, then the S.T.O. is expected to forward it to the applicant along with refund voucher or cheque. Thus, it is not necessary for the applicant (assessee/dealer) claiming refund to approach the authority, who has passed the order of forfeiture. He is not expected to run from one corner to other of the State to claim refund of amount of tax collected in excess from him. 28. Having spelt out the contours ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ruction which would render the provision nugatory ought to be avoided." 30.. An identical point was for consideration before the apex Court in the case of Raja Harish Chandra Raj Singh v. Deputy Land Acquisition Officer AIR 1961 SC 1500; (1962) 1 SCR 676. Section 18 of the Land Acquisition Act, 1894 requires that an application seeking reference to the court should be filed within six months from the date of the Collector's award. While interpreting section 18, the apex Court held that "the date of the award" cannot be determined solely by reference to the time when the award was signed by the Collector or delivered by him in his office. The apex Court said, it must involve the consideration of the question as to when it was made known to the party concerned either actually or constructively. If that be the true position, then placing a literal and mechanical construction on the words "the date of the award" occurring in the relevant section would not be appropriate. It is fair and just that a decision is communicated to the party whose rights will ultimately be affected or who will be affected by the decision. The knowledge, either actual or constructive, to the party affected b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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