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TMI Blog2009 (9) TMI 884X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 - DAS B.P. AND INDRAJIT MAHANTY , JJ. INDRAJIT MAHANTY J. M/s. Gupta Cables Private Limited (now known as Gupta Power Infrastructure Limited) a company registered under the Companies Act, 1956 is the petitioner in the present writ petition in which it has made prayer seeking quashing of the order dated March 9, 2009 (annexure 8) passed by the Assistant Commissioner of Commercial Taxes, Bhubaneswar Range, Bhubaneswar under section 57(3) of the Orissa Value Added Tax Act, 2004 (hereinafter referred to as, the OVAT Act, 2004 ), rejecting the refund application of the petitioner dated April 29, 2009 and further seeking a direction to the Assistant Commissioner of Sales Tax, Puri Range, Bhubaneswar, to refund Rs. 6,56,77,059.97 as unadjusted input tax credit under section 58(4) of the OVAT Act, 2004 read with rule 66 of the Orissa Value Added Tax Rules, 2005 (hereinafter referred to as, the OVAT Rules, 2005 ). Sri Sanjit Mohanty, learned senior counsel appearing for the petitioner, submitted that the petitioner was assessed for the assessment period April 1, 2005 to March 31, 2006 vide assessment order dated July 10, 2007 (annexure 1), in terms of which the assessing offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Additional Commissioner, Sales Tax (Revenue) vide his order dated December 31, 2008 (annexure 5) wherein, the appellate authority declared that the appellant was entitled to its claim for input tax credit of the tax paid by them on the purchase of furnace oil, as has been decided by the honourable High Court of Orissa in W.P. (C) No. 11333 of 2006 in the case of Reliance Industries Ltd., decided on May 15, 2008. It was further held in the said appeal that in case of other goods like grease, adhesive, bitumen paper, polythene, cotton waste and spare parts are concerned, the assessing officer has simply disallowed the input tax credit without ascribing any reason, the assessing officer was directed to go through the actual process of manufacture and decide the claim of input tax credit in accordance with the judgment of the honourable High Court in the case of Reliance Industries Ltd. (W.P.C. No. 11333 of 2006 decided on May 15, 2008 Reported in [2008] 15 VST 228. Accordingly, the order of assessment was set aside and direction was issued to make reassessment in terms of the observations indicated in the first appellate order. It is only after the disposal of the petitioner& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b-section (3) of section 57 of the OVAT Act, 2004. It is submitted that section 57 which also deals with a claim for refund of tax, interest or penalty paid by such dealer has no application to the application for refund sought for by the petitioner. The present case is not a case covered under sub-section (1) of section 57 of the OVAT Act. It is further asserted that sub-section (2) of section 57 stipulates that where a claim for refund is made on the basis of return furnished by an assessee the Revenue have a right to provisionally adjust such refund claim against any tax due or tax payable by the assessee for any subsequent period. The first proviso thereof stipulates that excess input tax credit shall not be carried forward beyond a period of twenty four months from the close of the year to which the tax period relates for adjustment against the tax due for the subsequent period or periods, except when dealer exercises option in writing for further carry-over. In the present case the petitioner asserts that in terms of rule 66 of the OVAT Rules, 2005 the petitioner had exercised its option not to carry forward the excess input tax credit to any subsequent tax period and had i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the petitioner submitted that the order impugned under annexure 8, rejecting the petitioner's application for refund may be quashed and direction may be issued to the authorities to effect refund of the amount applied for by the petitioner. Mr. S.K. Patnaik, learned counsel appearing for the Revenue on the other hand, submitted that there is no legal error what-so-ever in the order passed by the Assistant Commissioner of Sales Tax, Puri Range, Bhubaneswar, in rejecting the application for refund made by the petitioner, since the order of assessment on the basis of which refund application has been made, has been set aside in first appeal preferred by the petitioner and the matter stands remitted back to the assessing officer for reassessment. The learned counsel, placed reliance on section 57(3) of the OVAT Act and submitted that no claim for refund is entertainable unless the reassessment as directed by the first appellate authority is concluded. A further plea sought to be advanced by the Revenue in the counter-affidavit is to the effect that, the petitioner is not entitled to refund of excess input tax credit for the year 2005-06 since the excess input tax credit for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the subsequent assessment year 2006-07, is wholly erroneous and baseless. The learned counsel placed reliance on annexure B to the counter-affidavit of the petitioner which was the assessment order for the assessment year 2006-07. In particular he drew the attention of the court to the conclusion, reached by the assessing officer, that the tax for 2006-07 was determined to Rs. 4,10,69,342 where as the input tax credit availed to the petitioner during the said year, i.e., 2006-07 was Rs. 15,91,03,885.51. From the aforesaid availed input tax credit during the said year of assessment, i.e., 2006-07, an amount of Rs. 4,10,69,342 was deducted as output tax and a further amount of Rs. 5,82,09,363.25 was deducted as CST and a further amount of Rs. 34,90,753.28 was deducted towards reverse credit and once again excess input tax credit for the assessment year 2006-07 was determined to be Rs. 5,63,34,436.98. Sri Mohanty submitted that since during 2006-07 the petitioner also had excess input tax credit available during very same year, no question of seeking adjustment of excess input tax credit was available to the petitioner for the earlier year, i.e., 2005-06 could nor does arise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refund and had further directed the authorities to dispose of the application after necessary enquiry. Since the Commissioner had refused to exercise the power under the OVAT Act, it was no longer possible nor permissible for the Assistant Commissioner to effectively seek to withhold the refund by resorting to the purported power or the authority vested under section 57(3) of the OVAT Act and which has no application to the fact of the present case/situation. Sri Mohanty submitted that the submission made by the learned counsel appearing for the Revenue by relying on the tabular statement submitted in the court (extracted hereinabove) is wholly erroneous. He further submitted that the prayer of the petitioner to quash annexure 8 and to direct the authorities concerned to effect the refund, is within the competence of the High Court and in this respect he placed reliance on the judgment of the honourable Supreme Court in the case of Comptroller and Auditor General of India, Gian Prakash, New Delhi v. K.S. Jagannathan reported in AIR 1987 SC 537 and in particular para 20 thereof which is extracted hereinbelow: There is thus no doubt that the High Courts in India exercising the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case a party would be entitled to move the High Court for a writ of mandamus. In Padfield v. Minister of Agriculture, Fisheries and Food [1968] AC 997, the House of Lords held that where Parliament had conferred a discretion on the Minister of Agriculture, Fisheries and Food to appoint a committee of investigation so that it could be used to promote the policy and objects of the Agricultural Marketing Act, 1958, which were to be determined by the construction of the Act which was a matter of law for the court and though there might be reasons which would justify the Minister in refusing to refer a complaint to a committee of investigation, the Minister's discretion was not unlimited and if it appeared that the effect of his refusal to appoint a committee of investigation was to frustrate the policy of the Act, the court was entitled to interfere by an order of mandamus. In Halsbury's Laws of England, fourth edition, volume 1, para 89, it is stated that the purpose of an order of mandamus: 'is to remedy defect of justice; and accordingly it will issue, to the end that justice may be done, in all cases where there is a specific legal right and no specific legal remedy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessing authority shall first adjust such excess amount towards the recovery of any amount due in respect of which a notice under sub-section (4) of section 50 has been issued, or any amount due for any period covered by a return but not paid and, thereafter, refund only the balance, if any. (2) Where any refund is due to any dealer according to return furnished by him for any period, such refund may provisionally be adjusted by him against the tax due or tax payable, as per the returns filed under section 33, for any subsequent period: Provided that the excess input tax credit for any tax period shall not be carried forward beyond a period of twenty four months from the close of the year to which that tax period relates for adjustment against the tax due for subsequent period or periods, except when the dealer exercises option in writing for further carry over: Provided further that the amount of tax, including interest or penalty or both if any, due from, and payable by, the dealer on the date of such adjustment shall first be deducted from the amount of such refund before adjustment. (3) No claim for refund of any tax, including interest or penalty or both, if an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h retail invoice shall be in the minimum for a taxexclusive price of Rs. 1,000. (iii) the claim shall be made quarterly; (iv) the goods involved in the purchases are only for official use; and (v) the application for refund shall be filed within a period of fourteen days from expiry of the quarter. 66.. Refund of input tax credit carried forward beyond a period of twenty-four months. The claim of the refund under clause (a) of sub-section (4) of section 58 shall be made in form VAT 324 to the assessing authority of the circle or range, as the case may be, within one month from the date of expiry of the period of twenty four months from the end of the year to which the tax period relates: Provided that where the application as referred to in this rule is not made within the period of one month, it will be deemed that the dealer has exercised option to carry forward the excess input tax credit for adjustment against output tax payable in subsequent tax periods: Provided further that an application for refund made after the period of one month may be admitted by the assessing authority if he is satisfied that the dealer had sufficient cause for not making the appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te the necessity for making an application for refund, since it is mandated therein, that refund shall be allowed within sixty days of receipt of such order. Section 58 deals with special circumstance in which an assessee has unadjusted input tax credit still available even after twenty four months from the end of the year to which tax period relates and it is only in such case, that an assessee may within one month therefrom opt either to carry forward of input tax credit for adjustment against output tax payable in subsequent tax period or to seek refund thereof. Therefore sections 57 and 58 being distinct, we are therefore unable to accept the contentions of the Revenue that sections 57 and 58 must be read together. We are of the considered view that both the provisions have distinctly different circumstances for application and therefore cannot be read together. On a detailed reading of the impugned order, under annexure 8 by which order the Assistant Commissioner rejected the petitioner's refund application, it is clear that the only reason described in the said order relates to the condition imposed under section 57(3) of the OVAT Act, i.e., since the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er annexure 8 is not at all germane nor entertainable under the settled law since it is wellsettled principle of law that the impugned order must speak for itself and no additional ground can be taken in the counter-affidavit where the order impugned is under challenge. So on this score itself we are of the view that the contentions raised by the Revenue in the counter-affidavit itself are wholly baseless. Even though we are of the view that the additional reasons stated in the counter-affidavit cannot but rest on the reasons cited in annexure 8, even then, we are of the view that the claim made by the learned counsel for the Revenue that the excess input tax credit for 2005-06 had been adjusted during the assessment year 2006-07 is also wholly baseless. The tabular statement filed by the Revenue in course of hearing, noted hereinabove, itself clearly shows that whereas input tax credit brought forward in April, 2006 (relatable to assessment year 2005-06) is Rs. 7,43,06,022.11, the amount indicated in column 3 for the subsequent months is seen, in no month during the year 2006-07, has the input tax credit carried forward been less than the brought forward balance amount shown in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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