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TMI Blog2019 (8) TMI 573X X X X Extracts X X X X X X X X Extracts X X X X ..... aiming the refund. This was true even of the revised return filed in January, 2015. Consequently, the Respondent did not pass any order under Section 38 (4) carrying forward the refund amount. Resultantly, as far as the fourth quarter of 2013-2014 is concerned, the two-month period under Section 38 (3) (a) (ii) of the Act mandatorily applied. The Respondent was under a statutory obligation to grant refund to the Petitioner within that time period. The Court agrees with learned counsel for the Petitioner therefore that in the present case there is breach of Section 38 of the DVAT Act - the argument of the counsel for the Respondent is that on account of the pendency before the OHA of the proceedings pertaining to the demand for 2010-2011 the refund claim for the fourth quarter of 2013-2014 cannot be processed, is not a legally acceptable proposition. The proceedings contemplated under Section 38(4) were that pending prior to the expiry of the two month period within which the refund had to be granted. Where a demand is sought to be created much later than the two-month period, that cannot come in the way of the refund being granted. A direction is issued to the Respondent to i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... On 27th May, 2017 the Petitioner filed two objections against the above default notices before the Special Commissioner i.e. the Objection Hearing Authority (OHA). In terms of Section 35(2) of the DVAT Act, by virtue of the above objections being pending for the OHA, the demand created remained stayed till their resolution. 6. On 1st March, 2018 a fresh notice under Section 59(2) was issued for the period 2013-2014 the hearing of which got concluded on 31st March, 2018. On 31st March, 2018 notices of default assessment of tax, interest and penalty was issued under Sections 32 and 33 for the entire year of 20132014. A demand of ₹ 66,26,780/- was created and penalty of equal amount was imposed under Section 86(10) of the DVAT Act. On 5th April, 2018 the Petitioner filed the review application which was rejected by the VATO on 7th May, 2018. 7. Thereupon the Petitioner filed two objections on 30th May, 2018 under Section 74 of the Act before the Special Commissioner i.e. OHA. The contention of the Petitioner is that as far as the refund due to it for the fourth quarter of 2013-2014, it was entitled to refund of ₹ 4,94,02,989/- (excess tax credit ₹ 6,26,56,549/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s issued stating that if refund applications were not processed without delay individual responsibility would be fixed and reflected in the assessment of the officer concerned. 12. It is further contended that since the refund was not given to the Petitioner within two months as per Section 38 (3)(a)(ii) of the DVAT Act, the Petitioner was entitled to interest in terms of Section 42(1) of the DVAT Act. Reliance is also placed on the decision of the Allahabad High Court in Siddhant Chemicals vs. Union of India 2014 (307) ELT 44. 13. In response to the notice issued to it, the Respondent has filed short counter affidavit on 7th March, 2019 stating inter-alia that the claim of the Petitioner was pre-mature as several demands of tax interest and penalties for the pre-existing and the current period were pending against the Petitioner as per the details available on the DVAT portal. The objections filed by the Petitioner before OHA was pending consideration. In Para 6 of the counter affidavit in a tabular form the demand of tax, interest and penalty qua the Petitioner were shows as under:- S.No. Period Tax+Interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was made by the VATO (Audit) on 16th July, 2014 which was challenged in this Court by the Petitioner by filing WP(C) No. 6335/2014 questioning the jurisdiction of the VATO. By a judgment dated 3rd October, 2016 this Court set aside the aforementioned assessment order dated 16th July, 2014. On that date WP(C) No. 4901/2015 relating to refund of ₹ 9,94,35,199/- for the month of July, 2010 was allowed by this Court. The Respondent challenged the above order dated 3rd October, 2016 in WP(C) No.6335/2014 in the Supreme Court in SLP(C) (CC) No.9334/2017 which was dismissed by the Supreme Court on 7th July, 2017. 18. The fresh default notices of assessment under Section 59(2) were issued on 17th February, 2017 which was challenged by filing WP(C) No. 2703/2017. Since no stay was granted by the Court the Respondent passed a default assessment order on 29th March, 2017, leading the Petitioner to file CM No. 14557/2017 in the said pending Writ Petition No.2703/2017. This was disposed of on 18th April, 2017 requiring the Petitioner to avail the statutory remedy. Two objections were filed on 27th May, 2017 before the OHA which are still pending. It is stated that notwithstanding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (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) to (11) omitted since they are not immediately relevant for the case on hand] 20. Under Section 38 (3) (a) (ii) the refund has to be processed within two months from the date of filing of the return if the claim is made in the return. In terms of Section 38 (4) if a notice of audit, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 59 shall be excluded. It is obvious that exclusion can only be when the period of limitation itself has not run out. The consequence of this discussion is that the notice under Section 59 in connection with refund has to be issued within the period of two months stipulated in Section 38(3)(a)(ii). As a result, the submission of the learned counsel for the respondents that because of issuance of notice under Section 59 of the said Act, albeit beyond the prescribed time, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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