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TMI Blog2018 (4) TMI 1669X X X X Extracts X X X X X X X X Extracts X X X X ..... the Dealer till the date of payment of amount of refund, if such refund becomes due and payable by virtue of an order of assessment. This section therefore also recognizes the right of a dealer to receive refund with interest at the prescribed rate from the date of payment or from the date of closure of accounting year; whichever is later, till the actual refund is made - Undoubtedly, therefore, the petitioner was required to be refunded the recovered amount, pursuant to the order of assessment from the date of its refund till the actual payment - whether applying Gujarat Sales Tax Act or Gujarat Value Added Tax Act provisions. With the repeal of the Gujarat Sales Tax Act, 1969 and its substitution by the Gujarat Value Added Tax Act, 2003 the petitioner would be covered by the provisions of the VAT Act concerning the assessment, recovery and refund of the tax; including the prescribed rate of interest for refund. The amounts were recovered from the petitioners only in the month of February 2010, that is long after the VAT Act was brought in force. The petitioner cannot seek interest on the refund at the rate prescribed under the repealed Gujarat Sales Tax Act merely because the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fied the rate of interest at 9%, referring to the provisions of the Gujarat Sales Tax Act. Finally on 6th February 2017, the Department passed an order of refund, however for sometime thereafter, there was no actual payment. Finally, on 19th April 2017, the Department issued a cheque for a sum of ₹ 3,70,42,443/=. It appears that the petitioner had made some error in giving the bank account details, due to which, such cheque amount could not be credited in the petitioner s account. The petitioner corrected the error with the Department under letter dated 23rd May 2017. The refund was actually credited directly to the petitioner s bank account on 5th August 2017 under which a sum of ₹ 3,79,54,536/= came to be credited in the petitioner s bank account by the Department. We may record that this total amount comprises of the petitioner s principal amount of ₹ 3,39,83,894/= with interest as per the calculation of the Department and also takes care of the sum of ₹ 8,37,334/= which is subject matter of connected writ petition ie., Special Civil Application No. 23288 of 2017 which also arises in the similar background. The petitioner contends that the Departmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. Only after such details were correctly supplied by the petitioner, the Department could transfer money directly to the petitioner s account. For such period, the Department could not be burdened with interest liability. Section 54 of the Gujarat Sales Tax Act pertains to interest of delayed refund. Relevant portion of which reads as under :- 54. Interest on delayed refund : [ 1] Where refund of any amount becomes due to the Dealer by virtue of an order of assessment under Section 41, for the specified year, he shall, subject to the provisions of this Section, be entitled to receive, in addition to the said amount, simple interest at the rate of nine per cent, per annum on, the said amount from the date of immediately following the date of closure of the accounting year to which the said amount relates to the date of order of assessment : Provided that where dealer has paid any amount after the closure of the accounting year and such amount is required to be refunded, no interest shall be payable for the period from the date of closure of such accounting year to the date of payment of such amount : Provided further that no interest shall be payable o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such a question was examined by the Division Bench of this Court in the case of State of Gujarat v. Doshi Printing Press, [2015] 82 VST 384 [Gujarat] wherein, the Court held and observed as under : 9. In our view, once an order is passed by the competent authority for assessment and the appeal is preferred before the Appellate Authority against such order of assessment, and the Appellate Authority modifies the order of assessment, the principles of doctrine of merger would squarely apply. Once the order of assessment merges with the order of the Appellate Authority in appeal, one may say that the assessment is finalized by the Appellate Authority in the appeal. Same would be the situation if such circumstances arise in the Second Appeal or in any further appeal, expressly provided by the statute and the order of assessment of assessing authority or the first Appellate Authority is modified. One may say that the consequence in law would be the assessment made by the first authority and further modified by the first Appellate Authority and further modified by the second Appellate Authority or the third Appellate Authority as the case may be but, the ultimate determination of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee, therefore, cannot be stated to have arisen other than from the order of assessment. Somewhat similar provisions have been made in the Gujarat Value Added Tax Act concerning interest under Section 38. The said Section reads as under : 38. Interest on refund ( 1) Whether refund of any amount of tax becomes due to the dealer by virtue of an order of assessment under Section 34, he shall subject to the provision of this section be entitled to receive in addition to the amount of tax, simple interest at the rate of six percent per annum on the said amount of tax from the date immediately following the date of the closure of the accounting year to which the said amount of tax relates [till the date of payment of amount of such refund] Provided that where the dealer has paid any amount of tax after the closure of the accounting year and such amount is required to be refunded, no interest shall be payable for the period from the date of closure of such accounting year to the date of payment of such amount. ( 2) A registered dealer to refund in pursuance of any order other than referred to under sub-section (1) or in pursuance of any order by any court, sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owers conferred by or under the said Act shall be deemed to have been done or taken in exercise of the powers, conferred by or under this Act, as if this Act were in force on the date on which such thing was done or action was taken, and all arrears of tax and other amount due at the commencement of this Act may be recovered as if they had accrued under this Act. In terms of sub-section (1) of Section 100 of Gujarat Value Added Tax Act, 2003, thus, the Legislature while repealing the Gujarat Sales Tax Act, 1969 made a saving provision providing that such repeal shall not affect the previous operation of the Act, the obligations and liabilities arising and all actions shall be deemed to have been done or taken in exercise of the powers conferred by the VAT Act; as if the Act were in force on the date on which such thing was done or action was taken and all the arrears of tax and other amount due at the commencement of the Act would be recovered as if they had accrued as on the date of the Act. Thus, with the repeal of the Gujarat Sales Tax Act, 1969 and its substitution by the Gujarat Value Added Tax Act, 2003 the petitioner would be covered by the provisions of the VAT Act co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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