9911796707
TMI Blog2009 (5) TMI 869X X X X Extracts X X X X X X X X Extracts X X X X ..... the VAT Act") and the Central Sales Tax Act, 1956. It was earlier also registered under the then prevailing statute known as the Haryana General Sales Tax Act, 1973 (for brevity, "the GST Act") which stood repealed on April 1, 2003. The petitioner-firm is transacting business of trading at Jagadari and Sh. Ashok Kumar is the sole proprietor of the firm. The Excise and Taxation Officer-cum-Assessing Authority, Jagadari finalised the deemed assessment and worked out the refund due in respect of assessment year 2001-02 vide order dated February 14, 2005 (P1). Likewise it also finalized the deemed assessment in respect of assessment year 2002-03 vide order dated February 16, 2005 (P2). As a result of the assessment orders, the petitioner was found entitled to refund/adjustment of Rs. 1,53,628 and Rs. 4,57,808 in respect of the assessment year 2001-02 and assessment year 2002-03, respectively. The petitioner has given details of the background of the deemed assessment by placing reliance on the amendment dated October 30, 2001 made in the Rules (P3). For effective administration of sales tax and VAT, the whole State of Haryana has been divided into four divisions and Ambala Division i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the facts and circumstances of the case. The petitioner-firm also pleaded that rule 36, did not entitle the DETC to change the quantum of refund or to set aside the order of the Assessing Authority. However, the DETC vide order dated October 10, 2005 rejected the recommendation of the Assessing Authority and also the objection filed by the petitioner-firm. He examined the issues on merit and concluded that the refund worked out by the Assessing Authority was contrary to the GST Act and the Rules framed thereunder (P6 and P7). This order is subject-matter of challenge in the instant petition. The DETC has opined that the reason for putting up the report for sanctioning the amount of refund exceeding Rs. 10,000 before him is that he alone has been regarded as the sanctioning authority and the Assessing Authority has no power in that respect, after quoting the provisions of rule 36 of the GST Rules. The DETC has also rejected the arguments raised by the dealer-petitioner by observing as under: "Similarly the final argument that their appeal against the order for the year 1999-2000 revised by the DETC (1)-cum-Revisional Authority is pending before the Tribunal and the honourable Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur of the Revenue in the Monga Rice Mill's case [2004] 135 STC 549. No support can be taken by the dealer of the decision of the honourable Tribunal in L.T. Overseas case after the decision of the honourable apex court. The contention by the learned ITP that the sale has been made in the course of exports out of the territory of India and hence they are eligible for refund is also devoid of any merit. He has failed to draw my attention to any provision in his support under which a refund can be allowed. The provisions relating to export just contain that there will be no tax on the sale of goods in the course of exports and nowhere under the Central Sales Tax Act (Central Act) refund of tax paid on the purchase of goods sold to the exporters in the course of export under section 5(3) of the Central Act has been provided for. In the present case the Assessing Authority has not levied any tax on the sale of rice made in the course of export under section 5(3) of the Central Act." The respondent has filed a written statement and has not disputed the broad facts. However, it has been claimed that alternate remedy of appeal under section 39 of the Act and revision under section 40 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s passed the refund has to be claimed in accordance with such an order. Ms. Ritu Bahri, learned State Counsel, on the other hand submitted that the petitioner could have availed of alternative remedy of filing an appeal and raised all those issues which are now being agitated before this court. She has pointed out that the existence of an alternative remedy should ordinarily be insisted upon by the courts and the petitioners are liable to be relegated to the remedy of appeal. She has however, argued that the amount of refund is always adjustable. In cases where dealer is likely to pay dues of the Department, the refund is not permitted. According to her, if the assessment order is so absurd that nobody can sustain such an order then there is no bar on the power of the superior officer to refuse the grant of sanction to the refund order. After hearing learned counsel for the parties and perusing the paper book with their assistance, we would first examine and analyse the provision of rule 36 which is the basis of exercising power by the officer sanctioning the refund. The aforesaid rule in so far it is applicable to the facts of the present case reads thus: "Rule 36. Determinati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the higher authorities in hierarchy that may suggest that such an authority is competent to exercise power by substituting its own opinion with that of the Assessing Authority. The necessary distinction between the powers of recording assessment order and the power of determination of amount of refund by an Assessing Authority has to be borne in mind. According to the definition clause of section 2(a) of the GST Act read with rule 2(c) of the Rules, the Assessing Authority continues to be the Excise and Taxation Officer or the Assistant Excise and Taxation Officer. The assessment order has to be framed by the Assessing Authority in exercise of powers under Chapter V which deals with returns, assessment, reassessment and collection. After the assessment order has been passed under Chapter V of the GST Act, the question of refund has to be considered in accordance with section 43 under Chapter VII. Section 43 of that Chapter deals with refund and, therefore, it would be useful to read section 43, which is as under: "Section 43. Refund.-(1) (The Assessing Authority or a person appointed to assist the Commissioner under sub-section (1) of section 3, as the case may be) shall, in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... However, it does not mean that the whole amount of refund worked out by the assessing authority in an assessment order would become payable to the dealer. There may be other dues of the Revenue payable by a dealer which have to be first adjusted from the amount to be refunded as is provided by the proviso to section 43(1) of the GST Act. The whole gamut of determination of refund does not imply that the assessment order has to be tinkered with but it only implies that the amount of refund worked out by the assessment order is required to be adjusted towards the recovery of dues of the Revenue which might be payable by the dealer. Therefore, there is a marked distinction between the order of assessment and an order concerning determination of amount of refund. Both orders operate in two distinct areas which do not intermingle because determination of amount of refund itself presumes the existence of a valid assessment order whereby the amount of refund has been worked out and made payable to a dealer subject, however, to the adjustment of any dues of the Revenue. It is for that reason that rule 36 casts a duty on the assessing authority to scrutinize their accounts, make such inqu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing authority was set aside in appeal or revision. Placing reliance on a judgment of the Bombay High Court rendered in the case of State of Bombay v. Purshottamdas Dwarakadas Patel [1957] 8 STC 379, their Lordships observed as under (page 347 of 17 STC): "... In that case it was held by the High Court that an application for refund of sales tax paid under an order of assessment cannot be entertained by the Sales Tax Officer on the plea that the order was made on an erroneous view of the law, unless the order was set aside in appropriate proceedings by way of appeal or revision. The court in that case in a reference made under the Bombay Sales Tax Act disapproved of the view of the Board of Revenue which had, in arriving at its decision, followed the precedent in Sheikh Gauhar Sheikh Nazir's case [1952] 3 STC 331 (MP). Application for refund of tax was, therefore, not maintainable under section 13 of the C.P. and Berar Sales Tax Act, 1947, as originally framed." It has also been observed by their Lordships that the order of assessment is undoubtedly not final and could be set aside in appeal or modified in revision under the provisions of the statute. The Assessing Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is to determine the amount of refund has been clearly delineated. On principle, similar view has been expressed by the Division Bench of the Rajasthan High Court in the case of State of Rajasthan [1993] 91 STC 284. We further find that the reliance of the counsel for the petitioner on "excise cases" may not be strictly relevant as those cases emanates from different statutory enactments but on principle of refund a similar view has been followed. Therefore, we are of the view that on principle as well as on precedent, it stands established that an officer exercising the power of determining the amount of refund cannot exercise the power of review or appeal or revision. Such an officer has to respect the order of assessment and then is required to proceed to determine the amount of refund. The provisions of section 43 read with rule 36 postulate the limits of their power as already noticed and, therefore, the orders passed by the DETC are liable to be set aside. The arguments of the learned State counsel that the petitioner should first exhaust the remedy of appeal as per the provisions of section 39 has not impressed us because in cases where question of jurisdiction of con ..... 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