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TMI Blog2016 (6) TMI 1062X X X X Extracts X X X X X X X X Extracts X X X X ..... . Choudhury, J. The captioned writ petition is filed by the petitioner challenging the arbitrary action of the opposite parties in not granting refund of tax demand arising out of the first appellate order. FACTS 2. The unfolded story of the petitioner is that petitioner is a registered dealer under the Odisha Value Added Tax Act (hereinafter called OVAT Act ) and also under the Central Sales Tax Act (hereinafter called CST Act ). It carries on business in manufacturing and sale of aluminum ingots, carbon electrode paste, aluminum sheets etc. During the period from 1.4.2011 to 31.3.2012 the petitioner had effected sales against declaration in Form C to the tune of ₹ 404,91,16,679/-. Similarly, petitioner had made branch transfer and consignment sale for an amount of ₹ 1608,86,12,150/- and effected sales to SEZ to the tune of ₹ 18,20,241/-. 3. It is further case of the petitioner that the Assistant Commissioner of Sales Tax, Sambalpur II Circle, Sambalpur being the Assessing Officer made assessment illegally by not awarding sufficient opportunity to the petitioner to produce balance declaration Form C and F to the tune of ₹ 4,69,57,870/- a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irst Appellate Authority reduced the same to ₹ 99,851.00. It is also stated in the counter that no interest or penalty was levied on the tax by the First Appellate Authority for which the Revenue filed the Second Appeal on 31.1.2015. 7. It is also stated by the opposite parties that the provision of Section 60 (1) of the OVAT Act has been complied since notice has been issued on 7.11.2015 with intimation to petitioner of having an opportunity of hearing on 7.12.2015 and to show as to why the refund shall not be withheld on the ground that State has filed the Second Appeal before the Orissa Sales Tax Tribunal. The petitioner has no ground to file the present petition claiming refund before disposal of Second Appeal. It is submitted to reject the writ petition. SUBMISSIONS 8. It is submitted by the learned counsel for the petitioner that Section 57 of the OVAT Act clearly enshrines that refund of tax demand arising out of appellate order should be refunded within sixty days of receipt of the order. He also contended that not only the tax but also interest and penalty or both if paid by the dealer should be refunded to the assessee. According to him the opposite parties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act have been complied by the opposite parties. (ii) Whether the petitioner is entitled to the reliefs asked for. DISCUSSIONS POINT NO.(i) : 12. It is admitted fact that the petitioner was assessed by the Assessing Officer for the period from 1.4.2011 to 31.3.2012 and the Assessing Officer has passed order for a demand of ₹ 3,74,26,551/-. It is also not disputed that against the assessment order the First Appellate Authority reduced the demand to ₹ 99,251/- on the appeal preferred by the petitioner. It is also admitted fact that the petitioner had deposited the entire demand amount as assessed by the Assessing Officer and has claimed refund of same after adjusting the reduced amount. But the Commissioner of Sales Tax issued notice by proposing to withhold the refund to pay. 13. Section 57 (1) of the OVAT Act speaks as follows:- 57. Refund.- (1) Subject to other provisions of this Act and the rules, the assessing authority shall refund to a dealer, within a period of sixty days of the date of receipt of such order giving rise to such refund, the amount of tax, including interest or penalty or both, if any, paid by such dealer in excess of the amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refund, the following three conditions are to be satisfied. (i) The order giving rise to the refund is the subject matter of an appeal or further proceeding; and (ii) The Commissioner is of the opinion that grant of such refund is likely to adversely affect the revenue; and (iii) It may not be possible to recover the amount later. With no disagreement with the aforesaid view it has to be found whether the said provision has been complied or not. By going through the materials on record it is found that the First Appellate Authority has passed the order of demand of tax by reducing the demand. Moreover, in this case the Commissioner has not recorded his opinion that such refund is likely to affect the revenue or it is not possible to recover the amount later. Instead the opposite party No.2 issued a notice in the following form:- OFFICE OF THE COMMISSIONER OF COMMERCIAL TAXES, ODISHA, CUTTACK Letter No.15954/CT Dated 7.11.2015 E File No.II (II) 26/2015 To M/s. Hindalco Industries Ltd., Hirakud, Sambalpur, Tin-21601703134 Take notice that it is proposed to withhold sanction of refund u/s 60 (1) of the OVAT Act of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is passed at the original stage. The appellate or revisional authority, if it affirms such an order, need not give separate reasons if the appellate or revisional authority agrees with the reasons contained in the order under challenge . 16. It is also reported in (1995) 5 Supreme Court Cases 482 (LIC of India and another v. Consumer Education Research Centre and others) where Their Lordships observed at para-23:- 23. Every action of the public authority or the person acting in public interest or any act that gives rise to public element, should be guided by public interest. It is the exercise of the public power or action hedged with public element (sic that) becomes open to challenge. If it is shown that the exercise of the power is arbitrary, unjust and unfair, it should be no answer for the State, its instrumentality, public authority or person whose acts have the insignia of public element to say that their actions are in the field of private law and they are free to prescribe any conditions or limitations in their actions as private citizens, simplicitor, do in the field of private law. Its actions must be based on some rational and relevant principles. It must n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that natural justice has been violated and the order to withhold the refund has been finally passed by the opposite parties. It is true that Section 57 of the OVAT Act has been abridged as the Assessing Officer has not performed his duty for no payment of the refund within sixty days from the date of receiving of the order of the Appellate Court but the refund which has to be paid under Section 60, has been proposed to be withheld for the reasons stated. The show cause notice issued vide Annexure-8 can be termed as a stage before decision taken under Section 60 of the Act and therefore, it cannot be said that Section 60 of the OVAT Act has remained as non-compliance. Thus, the point No.(i) is answered accordingly. POINT NO.(ii) : 20. Petitioner has prayed for a direction to grant refund of the tax as per the statement of calculation vide Annexure-7 with statutory interest and after quashing the notice dated 7.11.2015 issued vide Annexure-8. Since the notice dated 7.11.2015 has been issued and no order of withholding the refund has been passed, it is not justified to quash the notice. Since under Section 60 the opposite parties have got power to withhold the refund subject t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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