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TMI Blog2015 (2) TMI 883X X X X Extracts X X X X X X X X Extracts X X X X ..... that since no order of refund was passed by the appellate authority in the appeal of the petitioner, the respondents were not obliged to refund the amount under Section 40 of the VAT Act. It is not necessary that an order of refund is required to be passed by the assessing authority in the assessment order or by the appellate authority. If no orders are passed, it is always open to the assessee to file an application under Section 40 of the VAT Act for refund of the amount upon which the competent authority is obliged to adjudicate on that application and pass an order for refund if after adjustment towards outstanding tax any amount is found to be in excess and which is required to be refunded. By not passing an order of refund when the amount is found to be refundable would amount to be judicial misconduct. We find that there was an error apparent on the record and the rectification application was rightly filed, which was rejected mechanically without application of mind. The outstanding amount due for the assessment year 2010-11 was only ₹ 11,25,88,286.00. The petitioner had deposited a sum of ₹ 16,06,94,740.00 and, consequently, an excess amount of ₹ 4,81, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly 75% stay of the disputed amount. The High Court directed the petitioner to furnish security with regard to the disputed amount under the CST Act. The petitioner filed a Special Leave Petition, wherein the Supreme Court directed the petitioner to deposit 10% of the amount demanded amount and furnish bank guarantee to the extent of 40% of the amount demanded. Based on the said orders, the petitioner deposited a sum of ₹ 16,06,94,740.00 of the tax under protest for the month of April and May, 2013 under the VAT Act and the CST Act. After the appeal was allowed by the appellate authority by an order dated 21.03.2014, the Supreme Court dismissed the Special Leave Petition as infructuous. The Supreme Court however, left it open to the petitioner to recover the amount deposited by way of pre-deposit from the respondent authority. The Supreme Court also indicated that the respondent authority will pay the amount of pre-deposit and release the bank guarantee in accordance with law. For facility, the order of Supreme Court dated 17.04.2014 is extracted hereunder: ?At the time of hearing of these petition, the Ld. Counsel for the petitioner submitted that during the pendency of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the matter is pending consideration. After remand by the Ist appellate authority, the petitioner filed an application for refund of ₹ 3,95,862.00 and for release of the bank guarantee. The appellate authority by an order dated 11.08.2014 rejected the application for refund but however, released the bank guarantee. The petitioner, being aggrieved by the said order, has filed the present writ petition praying for the quashing of the order dated 11.08.2014 and for a mandamus directing the appellate authority to refund the amount of ₹ 3,63,95,862.00, deposited by the petitioner under the conditional stay order for the assessment year 2009-10 under the VAT Act and the CST Act. In this background, we have heard Sri S.D.Singh, the learned Senior counsel along with Sri Gaurav Mahajan, learned counsel for the petitioner and Sri C.B.Tripathi, learned Special Counsel for the State. Sri C. B. Tripathi contended that no amount can be refunded, inasmuch as the amount deposited by the petitioner under the conditional stay order has been adjusted towards the outstanding demand for the assessment year 2010-11. Sri Tripathi further stated that the amount deposited for the assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority or from the date of receipt of the order giving rise to refund passed by any other authority or Court, till the date refund is made: PROVIDED that where refund relating to excess amount of input tax credit due on the basis of returns filed by the dealer, is not allowed within the time prescribed under section 15, the dealer shall be entitled to simple interest on such amount at the rate of twelve percent per annum from the date on which refund becomes due and till the date refund is made.? The Supreme Court in Hind Lamps (Supra) interpreted the expression ?found to be refundable? as an amount that is refundable as a result of adjudication. The Supreme Court held that there must be an order passed by the authority for refund of the amount and only then the amount becomes refundable to a dealer. The Supreme Court held as under: ?The expression used is ?found to be refundable?. In other words, it must be as a result of adjudication. The amount has to be found to be refundable. In the instant case, there is no such adjudication. Even otherwise, the power of adjustment lies with the authority under the statute. While granting refund, he has to first find out whether th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers are passed, it is always open to the assessee to file an application under Section 40 of the VAT Act for refund of the amount upon which the competent authority is obliged to adjudicate on that application and pass an order for refund if after adjustment towards outstanding tax any amount is found to be in excess and which is required to be refunded. By not passing an order of refund when the amount is found to be refundable would amount to be judicial misconduct. We find that there was an error apparent on the record and the rectification application was rightly filed, which was rejected mechanically without application of mind. The outstanding amount due for the assessment year 2010-11 was only ₹ 11,25,88,286.00. The petitioner had deposited a sum of ₹ 16,06,94,740.00 and, consequently, an excess amount of ₹ 4,81,06,454.00 was liable to be refunded since admittedly there were no other outstanding dues against the petitioner. Similarly, for the assessment year 2009-10, an amount of ₹ 3,63,95,862.00 was also liable to be refunded in the absence of any outstanding dues against the petitioner. We are also of the opinion that the Supreme Court in its order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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