9911796707
TMI Blog2016 (8) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... rections to the Respondent - Commissioner, Value Added Tax (Commissioner, VAT) to refund to the Petitioner the amounts claimed in the returns filed for various periods as reflected in the following tabular chart: Case No. Refund Period Date of filing return and refund amount WP(C) 5944/2016 01.01.2014 to 31.03.2014 7th October, 2014 Rs. 1,84,728/- WP(C) 6013/2016 01.01.2015 to 31.03.2015 23rd April, 2015 Rs. 2,47,928/- WP(C) 6014/2016 01.01.2012 to 31.03.2012 28th April, 2012 Rs. 34,406/- WP(C) 6015/2016 01.04.2011 to 30.06.2011 27th July, 2011 Rs. 1,03,714/- WP(C) 6020/2016 01.07.2012 to 30.09.2012 31st December, 2013 Rs. 92,600/- WP(C) 6022/2016 01.01.2013 to 31.03.2013 31st December, 2013 Rs. 1,50,264/- WP(C) 6023/2016 01.01.2011 to 31.03.2011 7th May, 2012 Rs. 1,60,602/- WP(C) 6024/2016 01.10.2011 to 31.12.2011 13th February, 2012 Rs. 1,23,053/- 2. The grievance of the Petitioner is that despite the lapse of over two months since the filing of the quarterly returns, the refunds were not issued in terms of Section 38(3)(a)(ii) of the DVAT Act. The Petitioner also points out that Circular No. 6 dated 15th June 2005 issued by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the above interpretation of Section 38(3) read with Section 38 (7)(d) of the DVAT is erroneous. He points out that Section 38 encapsulates a timebound point scheme for dealing with applications for refund. He points out that where the Commissioner under Section 38 (2) of the DVAT Act determines that any amount is due under the DVAT Act or the CST Act, then he shall first apply the refund towards recovery of such amounts before making any refund either under the DVAT Act or the CST Act. Mr. Lalwani further points out that it is in the context of the tax that is found due that the Commissioner is entitled to issue a notice, in terms of Section 38(4), under Section 58 of the Act, regarding audit, investigation and inquiry or seek additional information under Section 59 of the Act. He could also require the Assessee to furnish security under Section 38(5) of the Act. It is only when such adjustment is contemplated that the question of time limit under Section 38(3)(a) of the Act being subject to Section 38(7) of the Act would arise. He submits that in no instance can the consideration of the application for refund be postponed by the Commissioner beyond what is contemplated under Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 sub- section (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 under section 59; or (c) furnish returns under section 26 and section 27; or (d) furnish the declaration or certificate forms as required under Central Sales Tax Act, 1956, 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 sub-section (3) of this section unless the Commissioner is satisfied that the dealer has refunded the amount to the purchaser. (9) Where - (a) a registered dealer has sold g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 38(3) of the Act being subject to Section 38(7), as was advanced before this Court, does not appear to be consistent with the legislative intent behind the enactment of Section 38 of the Act. It is a timebound composite scheme which requires, in the first place, the DT&T to take immediate action upon receiving a return in which a refund is claimed. What Section 38(2) expects the Respondent to determine upon examining the claim of refund is whether there is any amount due from the dealer either under the DVAT Act or the CST Act. Such amount should already be found to be due. This is not an occasion, therefore, for the Department to start creating new demands either under the DVAT Act or the CST Act. In any event, even if the Department seeks to initiate the process for creating any fresh demand, that process cannot defeat the time period under Section 38(3)(a)(i) or (ii) for processing the refund claim. 11. Circular No. 6 of 2005 dated 15th June 2005 issued by the Commissioner VAT is binding on the DT&T. It curtails the time limit within which notices have to be issued, either for audit under Section 58 of the DVAT Act or for seeking information under Section 59 (2) of the DVAT Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Section 38 of the DVAT Act. 15. On the question of the Petitioner not uploading the requisite Form 9 under the CST Act till 9th February 2015, learned counsel for the Petitioner is right in his contention that Section 38 (7) has to be read with Section 38 (3) of the DVAT Act and not in isolation. Section 38 (3) opens with the words "Subject to sub-section (4) and sub-section (5) of this Section" and proceeds to refer to any amount remaining due "after the application referred to in sub-section (2) of this Section". If Section 38(7) is read in the context of Section 38(3) of the Act, it becomes clear that those time limit will have to be calculated in the context of the Commissioner determining that some other amount is due under the DVAT Act or the CST Act against which the refund claimed requires to be adjusted. In the present case, there was nothing found due from the Petitioner whether under the DVAT Act or the CST Act at the time the Petitioner's return for the said periods claiming refund were picked up for scrutiny. Had the DT&T responded promptly as was envisaged, then the Petitioner could have been asked to furnish the information or particulars as envisaged under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is strictly followed. He must initiate disciplinary action against those officers of the DT&T who are found disobeying the instructions issued by the Commissioner from time to time in this regard. The Commissioner should undertake a periodic review, at least once in two weeks, as to how many refund applications have been processed and within what time. Responsibility should be fixed on derelict officers and disciplinary proceedings initiated where there is a clear breach of the statutory duties. The collective failure of such officers is imposing a huge interest burden on the exchequer which is clearly avoidable. 19. The Court therefore issue the following directions as far as the present petitions are concerned: (i) in relation of each of the refund claims for the period above mentioned, the Respondent DT&T will issue to the Petitioner the amount of refund claimed with interest up to the date of payment which shall not be later than two weeks from today; (ii) if there is disobedience of the above directions, it would be open to the Petitioner to seek appropriate remedies in accordance with law. 20. The petitions are disposed of in the above terms. CM No. 24776/2016 (Exemption ..... X X X X Extracts X X X X X X X X Extracts X X X X
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