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TMI Blog2017 (1) TMI 1221X X X X Extracts X X X X X X X X Extracts X X X X ..... refund, as mandatory under Section 51(1)(aa) of the Gujarat Sales Tax Act,1969 (hereinafter referred to as the "Act"). 4.0. The short but interesting question of law posed for consideration of this Court is whether on the refund amount of predeposit, which the petitioner deposited while preferring the appeal before the learend Tribunal, when the petitioner has succeded before the learned Tribunal and the demand of tax is set aside and consequently the amount of predeposit is refunded, the petitionerdealer is entitled to interest on such refund of predeposit as mandatory under Setion 54(1)(aa) of the Act. 5.0. For the sake of convenience, the facts in Special Civil Application No.17876 of 2016 are narrated, which in nutshell are as under: 5.1. That the assessment orders came to be passed by the Assessing Officer for Assessment Years 199495, 199596, 199697 and 199798 on 31.08.2008, in the case of petitioner no.1 company. By virtue of the aforesaid orders, the Assessing Officer inter alia found the petitioner no.1 dealer to pay tax under Section 15(B) of the Act and in view thereof pay additional demand of tax visavis purchases made by the petitioner no.1. 5.2. Being aggrieved an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the specifications given in the Act. 5.6. It is the case of the petitioners that adhoc deposits to the respondent authorities, made by the petitioner no.3 which have made prior to admission of the respective appeals was greater than the final liability of tax, petitioner no.1 was entitled to be granted a refund of the balance amount under Setion 54 (1)(aa) of the Act. That thereafter, respondent no.2 passed the orders dated 31.05.2016 directing release of the stated amount in favour of the ptitioner no.1 in view of the order of respondent no.3. According to the petitioner, however the amount stated in the said order of the respondent no.2 did not include the accurate amount of interest on such refund and according to the petitioners, they were entitled to interest at the rate of 9% p.a on such refund, more particularly, considering Section 54(1)(aa) of the Act. Hence, respective petitioners have preferred present Special Civil Applications for the aforesaid reliefs. 6.0. Shri Tanvish Bhatt, learned advocate has appeared on behalf of the respective petitioners and Shri Hardik Vora, learned AGP has appeared on behalf of the respondentState. 7.0. Shri Tanvish Bhatt, learned advoc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at with respect to the amount of predeposit, Section 54(1)(aa) of the Act shall not be applicable at all as the amount towards predeposit cannot be said to be deposit of tax. It is submitted that Section 54 of the Act shall be applicable in case of refund of tax and / or on delayed refund of tax. 8.2. Shri Vora, learned AGP appearing on behalf of the State has relied upon the decision of the Bombay High Court in the case of Suvidhe Ltd vs. Union of India reported in 1996(82) ELT 177 in support of his submission that any amount deposited torwards predeposit cannot be said to be a payment of duty but can be said to be only a predeposit for availing the right of appeal. 8.3. Shri Vora, learned AGP has also relied upon the decision of the Hon'ble Supreme Court in the case of Commissioner of Customs (Import), Raigad vs.Finacord Chemicals (P) Ltd reported in AIR 2015 SC 2752, in support of his above submissions. It is submitted that therefore, the petitioners shall not be entitled to any interest on refund of amount of predeposit, more particularly, under Section 54(1) (aa) of the Act. 9.0. Heard the learned advocates for the respective parties at length. 10. The short but intere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal against an order of assessment with or without penalty or against an order mposing penalty shall ordinarily be entertained by an appellate authority, unless such appeal is accompanied by satisfactory proof of payment of the tax with or without penalty or, as the case may be, of the payment of the penalty in respect of which an appeal has been preferred; PROVIDED that an appellate authority may, if it thinks fit, for reasons to be recorded in writing, entertain an appeal against such order: (a) without payment of tax with penalty (if any) or as the case may be, of the penalty, or (b).on proof of payment of such smaller sum as it may consider reasonable , or (c) on the appellant furnishing in the prescribed manner security for such amount as the appellate authority may direct. 11.2. Considering subsection( 4) of Section 65 of the Act, whatever the amount is deposited would be towards payment of the tax / part payment of the tax, may be as a condition precedent for availing right of appeal. In a given case, if the appeal against the assessment order is dismissed and the tax liability / demand of tax is confirmed, in that case, whatever amount deposited at the time of pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld that the principle of unjust enrichment and / or Section 11(b) of the Central Excise shall not be applicable. 13.1. As per the catena of decisions of this Court, more particulalry, referred to herein above and which are relied upon by the learned advocate for the petitioners, the dealer is entitled to interest under Section 54(1)(aa) of the Act on refund arising from the appellate order. In the present case, the petitioners are entitled to refund the amount arising and / or pursuant to the appellate order. Therefore, there is no reason to deny the interest on delayed payment of such refund, more particularly, on refund of amount deposited as a predeposit and while preferring the appeal, however subject to provision of Section 54 of the Act i.e. the period of 90 days shall be calculated from the date of receipt of the appellate order by the Sales Tax Officer. 14.0. In view of the above and for the reasons stated above, both thess petitions succeed. It is held that respective petitioners shall be entitled to interest at the rate of 9% p.a on the amount deposited by them as predeposit while preferring the appeal against the assessment order, however simple interest at the rate of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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