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TMI Blog2016 (7) TMI 858X X X X Extracts X X X X X X X X Extracts X X X X ..... with interest was due for the months of November 2012 for the year 2012-13 and in the case of NIPL it was due for the 3rd and 4th quarter for 2012-13 as well as 1st, 2nd, 3rd and 4th quarters of 2013-14. 3. The case of the Petitioners is that they have been filing returns as and when due under the DVAT Act. For the month of November 2012, the return was filed on 27th December 2012 claiming refund of Rs. 20,46,725. It is submitted that in respect of the said claim, the due date for issuance of refund in terms of Section 38 of the DVAT is 27th February 2013. As regards the quarterly returns for the 3rd and 4th quarter relating to 2012-13, returns were filed on 31st October 2013 (revised) and 26th April 2013 (original) respectively. The respective due dates for issuance of the refund as claimed in these returns were 31st December 2013 and 26th June 2013 respectively. 4. As regards the returns for 2013-14 the revised returns for the 1st and 2nd quarter were filed on 16th July 2014 claiming refund and for the 3rd and 4th quarter on 28th March 2015 (all revised returns) claiming refund. While the due date for issuance of refund for the 1st and 2nd quarter for 2013-14 was 16th Septembe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not adhered to the time limits set out in Section 38 of the DVAT Act and in Circular No. 6 issued by the Commissioner, VAT under Section 67 (2) of the DVAT Act. Relegating the Petitioner, in the circumstances, to the alternative remedy of going before the OHA would only further delay the refund and therefore, is not considered to be efficacious. The preliminary objection is, accordingly, rejected. 9. It is submitted by the Respondent that a survey was undertaken by the Enforcement Branch in the business premises of the Petitioners on 17th October 2014 wherein not only some variation in cash and stock was found but also it was admitted by the dealer that it was engaged in making purchases "from suspicious dealers" thereby claiming false ITC and false refunds. It is stated that the Petitioner voluntarily surrendered the ITC claimed in respect of the transaction with M/s. Eagle Trade Mart. 10. As regards the failure to make refund, it is stated that in view of the survey undertaken it became necessary to ask the Petitioner to place the documents on record for the satisfaction of the Assessing Authority, before assessing/processing of refund. Since the Petitioner had not filed any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ising that the Respondent has, while filing the counter- affidavit on 16th December 2015, concealed the above fact of OHA having found the survey undertaken to be illegal. The Court further notices that the OHA has, in the same order, adversely commented on the fact that although the notices of default assessments of tax, interest and penalty had been issued by the AVATO for the relevant tax period of 3rd quarter of 2014, yet disallowance of ITC on the purchases made from M/s. Eagle Trade Mart pertained to the earlier year 2013-14. It has been pointed out that the case of disallowance of the ITC ought to have been taken into consideration in a separate assessment order and not to be clubbed in the assessments for the aforesaid 3rd quarter of 2014. The OHA has also observed that the Petitioner had submitted evidence regarding the functionality of the alleged cancelled dealer, M/s. Eagle Trade Mart, through ward records and replies obtained under the RTI. Consequently, the OHA had concluded that the claim of the surveying Enforcement Officers that M/s. Eagle Trade Mart was a cancelled dealer, "appears to be totally wrong, deceptive, incorrect and false, which is why, the Advance Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he person pursuant to the powers conferred in section 25 of this Act within fifteen days from the date on which the return was furnished or claim for the refund was made. (6) The Commissioner shall grant refund within fifteen days from the date the dealer furnishes the security to his satisfaction under sub-section (5). (7) For calculating the period prescribed in clause (a) of subsection (3), the time taken to- (a) furnish the security under sub-section (5) to the satisfaction of the Commissioner; or (b) furnish the additional information sought u:nder section 59; or (c) furnish returns under section 26 and section 27, shall be excluded. (8) Notwithstanding anything contained in this section, where- (a) a registered dealer has sold goods to an unregistered person; and (b) the price charged for the goods includes an . amount of tax payable under this Act; (c) the dealer is seeking the refund of this amount or to apply this amount under clause (b) of sub-section (3) of this section; no amount shall be refunded to the dealer or may be applied by the dealer under clause (b) of subsection (3) of this Section unless the Commissioner is satisfied that the dealer has ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oncluded assessment. 17. As rightly pointed out by learned counsel for the Petitioner, the law explained by this Court in Swarn Darshan Impex (P) Limited v. Commissioner, Value Added Tax (supra) appears to squarely apply in the facts and circumstances of the present case. In the said decision, the Court analyzed Section 38 (3) as under: "5. A plain reading of Section 38, which deals with refunds, makes it clear that by virtue of sub-section (3) thereof, in the case where a person is assessed quarterly, the refund is to be made to the dealer within two months after the date on which the return is furnished or the claim for the refund is made. Of course, it is the dealer's option to elect as to whether the refund is to be made in cash or the said amount is to be carried forward to the next tax period as a tax credit in that period. In the present case, the petitioner has elected for the grant of refunds in cash and has not elected for carrying forward the refund amount to the next tax period. The provisions of Section 38(3) uses the expression "shall" and, therefore, it is clear that the refund has to be made within two months from the date of the return." 18. The Court in Sw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19. The Court in Swarn Darshan Impex (P) Limited v. Commissioner, Value Added Tax (supra) also rejected the argument that the issuance of notice to the dealer under Section 59 of the DVAT Act could delay the grant of refund. The Court observed as under: "13. In any event, even if we assume that the said notice was issued by the respondents and that it had been received by the petitioner, it would not change the position in law. Sub-section (4) of Section 3 8 has to be read with the provisions of sub-section (3) of Section 38. By virtue of the latter provision, the refund had to be paid to the petitioner within two months from the date of the return furnished by him. No such notice under Section 59 requiring additional information had been issued during that period. Consequently, the subsequent purported issuance of notice under Section 59 cannot be taken as a ground for not paying the refund to the petitioner. In this connection, the provisions of sub- section (7) of Section 38 also needs to be examined. The said provision stipulates that for calculating the period prescribed in Section 38(3)(a), the time taken to, inter alia, furnish additional information sought under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X
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