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TMI Blog2020 (4) TMI 832X X X X Extracts X X X X X X X X Extracts X X X X ..... ed with costs. - Writ Petition No.943 of 2014 - - - Dated:- 27-4-2020 - Honourable Sri Justice M.S. Ramachandra Rao And Honourable Sri Justice T. Amarnath Goud For the Petitioner : Sri S.R.R.Viswanath For the Respondents : G.P. for Commercial Taxes, Telangana ORDER (PER SRI JUSTICE M.S.RAMACHANDRA RAO) The Background facts The petitioner in this Writ Petition is M/s ACC Limited, a Company registered under the Companies Act, 1956 and engaged in the manufacture of cement and cement products. 2. The petitioner was assessed to Sales tax during the years 1979-80 and 1980-81 on the turnover relating to packing material i.e gunnies under the APGST Act,1957 (for short the Act ). Vide order dt.27.3.1984, the original adjudicatory authority levied tax at basic rates of 3% and 8% on packing material and cement respectively and completed assessment for 1979-80. Similar order was passed on 20.3.1985 for the assessment years 1980-81. 3. Subsequently, the said orders were revised by the Dy.Commissioner (CT), Begumpet Division on 11.3.1987 (1979-80) and 9.3.1987 (1980-81) on the ground that the Commercial Tax Officer had levied basic tax at 3% instead ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r affidavit filed on behalf of the respondents on 31.3.2015, it is stated that in the absence of realization particulars relating to the amount of ₹ 28,10,432/-, credit was not given, which resulted in withholding of the said amount. 15. So on 21.4.2015, a Division Bench presided over by Justice R.Subash Reddy ( as his Lordship then was) recorded all the above facts , noted that under the Act, if there is delay in refunding the amount due to the assessee, interest is also required to be paid to the assessee, called for a report from the Commissioner of Commercial Taxes ( Telangana) to be submitted by 28.4.2015 indicating the reasons for withholding the said amount and whether such amount paid by the petitioner by way of Demand Draft were realized or not and if not realized, why the same was not realized, and the persons responsible for such dereliction of duty. 16. Thereafter the matter was listed on 28.4.2015, 15.6.2015, 24.9.2019,24,10,2019,7,11,2019,13.11.2019 but no report as directed by this Court in it s order dt.21.4.2015 has been filed more than 4 years. 17. On 26.11.2019, this Court issued show cause notice to Mr.V.Anil Kumar, IAS, Commissioner of Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 24. The delivery of these Demand Drafts was as per Rule 35 r/w Rule 17 of the APGST Rules, 1957 pursuant to revision demand through Form B-3 notice made by the 1st respondent who had given effect to the revision made by the 2nd respondent. By doing so, payment by the petitioner was complete and nothing more was expected of it. 25. Sec. 64(1) of the Negotiable Instruments Act,1881 makes presentation of a bill of exchange (like a Demand Draft) to the drawee equivalent to payment. In other words, handing over payment by Demand Draft tantamounts to payment in cash and discharges petitioner of it s obligations. The presentation of the Demand draft and it s encashment is the exclusive responsibility of the respondents, the petitioner has nothing to do with it and the respondents cannot take advantage of any lapse , if any, in presenting the two Demand drafts to the Bank for realisation. 26. In National Sugar Industry and another v. Narala Venkiah (Died) per L.R (1994(3) ALT 276) by the A.P.High Court, this Court also held that handing over Demand Drafts amounts to payment . In the said case, this Court held: 12. Admittedly, the plaintiff had to pay 25% of the cost ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment i., acknowledgement of the debt is the date of payment made to the post office by the debtor or the date of receipt of the money by the creditor . The Court held that the date the money was handed over to the post office will be the date of payment. It declared that if a debtor pays a cheque towards a debt which was not in dispute at that time and there is a delay in encashment thereof, nevertheless the payment by cheque made by the debtor to the creditor, as evidenced by the cheque, is to be deemed to take effect from the date when the cheque was drawn and posted by the debtor to the creditor. The date when the creditor realizes the cheque is not significant. And the same principle would be applicable even to payments sent through the media of post office. 28. In CIT v. Ogale Glass Works Ltd. (1955) 1 SCR 185 : AIR 1954 SC 429 : (1954) 25 ITR 529 , the Supreme Court also held that The engagement of the Government was to make payment by cheques. The cheques were drawn in Delhi and received by the assessee in Aundh by post. According to the course of business usage in general to which, as part of the surrounding circumstances, attention has to be paid under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.P. High Court observed: 12. on a mere subjective opinion that the refund would affect the Revenue adversely, it cannot be withheld. The Government as a litigant to the case before the appellate Tribunal cannot be permitted to withhold the refund only on the ground that they intend to file a tax revision case. Section 40(2) of the VAT Act requires prior approval to withhold the refund by the Deputy Commissioner. When the statute prescribes the authority and also prescribe other authorities for refund/adjustment of VAT/TOT, notwithstanding the fact that the approving authority is a higher official, the legislative choice of conferring power on the Deputy Commissioner cannot be ignored. Even if the Joint Commissioner, by virtue of Rule 59 of VAT Rules, is the authority to approve refund if the amount exceeds ₹ 10,00,000/-, in the event of withholding refund, necessary approval of the Deputy Commissioner has to be obtained. We do not find any inconsistency or incongruity therein. More often than not any quasi-judicial authority would be inferior in the organizational set up in comparison to an authority who takes administrative decisions. On that ground also the advice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by Act 16 of 1963 w.e.f. 1.8.1963. 35. Section 33C of the Act states: S.33-C. Power to withhold refund in certain cases : Where an order giving rise to a refund to an assessee or licensee is the subject matter of an appeal or further proceeding, or where any other proceeding under this Act is pending, and the assessing or the licensing authority is of the opinion that the grant of the refund is likely to adversely affect the revenue, the assessing or the licensing authority may, with the previous approval of the Deputy Commissioner, withhold the refund till such time as the Deputy Commissioner may determine. 36. It thus empowers the assessing or licensing authority, if of the opinion that the grant of refund is likely to adversely affect the revenue, where an order giving rise to a refund to an assessee or licensee is the subject matter of an appeal or further proceeding or where any other proceedings under the Act of 1957 is pending, with the previous approval of the Dy. Commissioner, to withhold the refund till such time as the Dy. Commissioner may determine. 37. The provisions of Sections 33E and 33F deal with interest on delayed refund. 38. Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, if the same is paid after the expiry of 6 months from the date of the order referred to in Section 33-C to the date the refund is granted. 37. In the above circumstances an order Under Section 33C withholding the refund does adversely impact the dealer. Not only is he deprived of a higher rate of interest payable by the State for delayed refund of the amounts deposited (at 12% as against 18% p.a.) but the period for which interest is payable is also postponed pejoratively to the dealer's interest i.e., after 60 days from the date of receipt of an order passed Under Sections 19 of 21 [vide the 3rd proviso to Section 21(2)]; as against the dealer's entitlement to only a lower percentage of interest (12% p.a.) and if the refund is withheld for a period beyond 6 months from the date of the order referred to in Section 33C [Section 33-F(2)]. 38. Since Section 33-C confers a discretionary but not an absolute power to withhold refund and only on the formation of an opinion as to the adverse impact on revenue, the assessing authority must exercise discretion on relevant grounds and for germane reasons. 43. If power granted for a particular purpose by the Statute, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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