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TMI Blog2008 (5) TMI 617X X X X Extracts X X X X X X X X Extracts X X X X ..... sp; The second is Writ Petition (Civil) No. 17391 of 2006 in which the prayer of the petitioner is for setting aside order No. 437 dated October 20, 2006 issued by the Joint Commissioner of Sales Tax under the provisions of rule 29 of the Delhi Sales Tax Rules, 1975 (for short, "the Rules") in respect of the assessment years 1997-98 to 1999-2000 (three years). According to the petitioner, it was entitled to a refund of sales tax erroneously levied and demanded but that was declined by the impugned order. Broadly speaking, the petitioner is a limited company engaged in the manufacture, sale and purchase of electronic items. It has a chain of distributors and dealers through whom its goods are sold to ultimate consumers. The petitioner does not, by itself, sell any goods directly to the consumers-sales are effected only through the distributors/dealers. According to the petitioner, it had floated schemes by virtue of which it offered trade discounts against the catalogue price of the goods for the benefit of the distributors and dealers. The petitioner also gave cash discounts on immediate payments. Contracts were entered into by the petitioner with its distributors and dealers an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e included in its taxable turnover. Following the decision of the Supreme Court, the Deputy Commissioner/ appellate authority decided in favour of the petitioner and required the assessing officer to have a fresh look at the matter. On April 7, 2003, the assessing officer reconsidered the case of the petitioner and for the assessment year 1997-98, he granted a refund of Rs. 5,15,656. The assessing officer noted that the assessee had filed a complete set of credit notes showing credit of sales tax to the respective parties. One of the issues canvassed by the learned counsel appearing before the assessing officer was that the sales tax had already been returned by issuing credit notes and this was examined by the Deputy Commissioner/appellate authority who accepted the contention of the petitioner. Based on the facts of the case as well as the submissions made by the petitioner, the assessing officer examined the record and allowed the claim made by the assessee. In respect of the assessment year 1998-99, the assessment of the petitioner went through the same fate and on remand by the Deputy Commissioner, the assessing officer passed an order on December 8, 2003 accepting the cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that now remains pertains to refund. The final decision has to be taken under rule 29 of the Delhi Sales Tax Rules, 1975. The Assistant Commissioner has observed that since the refund amount is substantial, a verification of the records to examine whether refund is rightly due to the dealer, should be made. In the circumstances of the case, we direct the Assistant Commissioner to pass a reasoned order on the application for refund within four weeks from today. With these observations, the writ petition is disposed of. Order be given dasti to both the parties." It may be mentioned that in the meanwhile, the VAT Act came to be enacted and was brought into force with effect from April 1, 2005. Significantly, the VAT Act did not provide for any power of revision such as the one which existed under the repealed DST Act. This is of considerable importance as will be apparent a little later. In any event, after the order dated September 22, 2006 passed by this court, the assessment orders became final since the show-cause notices were withdrawn and the chapter of "reassessment" was closed and the reassessment order was also withdrawn. What, therefore, remained to be considered was th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore us was that in the absence of an appropriate saving clause, coupled with the fact that the revisionary power was deliberately not conferred upon the Commissioner under the VAT Act, could the Commissioner exercise powers conferred by section 46 of the repealed DST Act. This very issue had arisen before us in Writ Petition (Civil) No. 5828 of 2007 (International Metro Civil Contractors v. Commissioner of Sales Tax/ VAT, Delhi) decided on March 14, 2008(1) and we had expressed the opinion that after April 1, 2005, the Commissioner of Sales Tax had no power to revise an order passed under section 46 of the repealed DST Act, since such a power was deliberately not conferred upon him. The repeal and savings section (section 106) of the VAT Act did not save the power under section 46 of the DST Act. We were told by learned counsel for the Revenue that the decision rendered by us in International Metro Civil Contractors(1) was the subject matter of a petition for Special Leave to Appeal (Civil) No. 7470 of 2008 (Commissioner, Value Added Tax, New Delhi v. International Metro Civil Contractor) and by an order dated March 31, 2008 passed by the Supreme Court, it was made clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estion that remained was of granting a refund to the petitioner. We are not going into these issues because it is not necessary to do so particularly since we have held that the exercise of power by the Commissioner was without jurisdiction. The next question that arises for consideration is whether the claim for refund was rightly rejected. This is the subject-matter of Writ Petition (Civil) No. 17391 of 2006. Our answer to this question is in the negative and there are two reason for it. Firstly, since the suo motu revision of the assessment order has been held to be bad in law, the natural consequence is that the assessment orders sought to be revised must be held to have been validly passed. That being so, there is no impediment in accepting, in principle, the claim for refund subject to any legal obstacle. Is there any legal obstacle? The claim for refund was made by the petitioner under section 30 of the DST Act. Ordinarily, the claim must be allowed in view of the provisions of section 30(1) of the DST Act, but it may be rejected only on the grounds mentioned in section 30(3) and section 30(6) of the DST Act. These provisions read as follows: "30. Refund.-(1) If a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im was made is not the subject-matter of any appeal or any other proceeding. Consequently, the refund claim must be allowed in favour of the petitioner since no legal bar exists. We may also note that what the Revenue is effectively attempting to do is to reopen a closed assessment while considering the application for refund. Clearly, this is not permissible. On the facts of the present case, this is all the more so because the Revenue had earlier tried to reopen the completed assessment but when that was challenged by the petitioner by filing a writ petition in this court, the Revenue decided to withdraw the show-cause notices issued to the petitioner for reassessment. To make matters worse for the Revenue, even the reassessment order that had been passed for the assessment year 1999-2000 was withdrawn by the Revenue. It is, therefore, quite clear that the Revenue is trying to do collaterally and in a roundabout manner what it could not succeed in doing on an earlier occasion. In the garb of examining the claim for refund, which can be rejected only under the conditions specified in section 30 of the DST Act, the Revenue is wanting to reopen and reassess all the completed asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bangalore v. Chandanmal Champalal & Co. [1994] 95 STC 5 in which the Supreme Court applied the principle of unjust enrichment and denied a claim for refund. While referring to that decision as well as Mafatlal Industries [1998] 111 STC 467 (SC); [1997] 5 SCC 536, the Division Bench declined to grant refund of sales tax on the ground that the tax was in fact collected by the assessee therein which was then passed on to the customers. It was held that a direction for refund of the sales tax passed on would amount to unjustly enriching the assessee therein. In our opinion, the decision rendered by a Division Bench of this court would be applicable to the facts of this case. In view of the Division Bench decision, the principle of unjust enrichment would apply to a case such as the present which pertains to a refund of sales tax. However, what needs to be determined is whether the petitioner had passed on the benefit of the trade discount to its dealers and distributors. We feel handicapped in making such a determination on the existing paper book because the facts of the case in this regard are not at all clear. In the impugned order rejecting the claim for refund, the Joint Commis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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