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TMI Blog2022 (11) TMI 1274X X X X Extracts X X X X X X X X Extracts X X X X ..... ons for refusing to grant concessional rate of tax is on the ground that the IOCL has not revised their returns, they have not amended the invoices and not issued credit notes to the writ petitioner. Therefore, it is to be seen that whether there is a necessity for IOCL to file a revised return so as to enable the assessing officer to take note of the Form C declaration and levy concessional rate of tax. A combined and conjoint reading of Section 8(4) of the CST Act and the proviso to Rule 12(7) of the CST rules shows that the necessity to file revised return does not arise. In Radio and Electricals Limited [ 1966 (4) TMI 59 - SUPREME COURT ], the Hon ble Supreme Court held that though the tax under the Act is levied primarily from the seller; the burden is ultimately passed on to the consumer of goods because it enters into price paid by them. The Parliament with a view to reduce the burden on the consumer arising out of the multiple taxation as provided in respect of sales of declared goods which have special importance in interstate trade or commerce and other classes of goods which was purchased at an intermediate stage in the stream of trade or commerce prescribed low rates of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther pointed out that the Principle Act does not contain any separate definition of sale price and after referring to the definition of sale and turn over, it was held that there is nothing in those provisions which would indicate that when the dealer collects any amount by way of tax that cannot be part of the sale price and so far as the purchasing dealer is concerned, he pays for the goods what is sellers demand namely price even though it may include tax and therefore there is no reason why the whole amount paid to the seller by the purchaser should not be treated as the consideration for the sale and included in the turn over. Further the Hon ble Supreme Court pointed out that when the seller passes on the tax and the buyer agrees to pay sales tax in addition to the price, the tax is really part of the entire consideration and the distinction between the two amounts tax and price loses all significance. Firstly, the decision cannot be applied to the facts of the case on hand as in the said decision, the Hon ble Supreme Court was considering the constitutional validity of statute which did not contain a definition for sale price . Secondly, in paragraph 14, the observation made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... othari, Adv.........For the Appellants Mr. Kavin Gulati, Sr. Adv. Mr. Sumeet Gadodia, Adv. Mr. Avi Tandon, Adv. Mr. Avra Mazumder, Adv. Ms. Shilpi Sandil Gadodia, Adv. Mr. Binayak Gupta, Adv. Mr. Sk. Md. Bilwal Hossain, Adv. ……..For the Tata Steel Limited Mr. Jaweid Ahmed Khan, Adv. Mr. Bhaskar Sengupta, Adv. Mr. Talha Ahmed Khan, Adv. ……For the Indian Oil Corporation Limited JUDGMENT (Judgment of the Court was delivered by T.S.SIVAGNANAM, J.) 1. This intra court appeal is directed against the order dated December 6, 2021 in WPA No. 5306 of 2021 filed by the first respondent herein, M/s. Tata Steel Limited (hereinafter referred to as the writ petitioner). The appellants are the Commissioner of Commercial Taxes West Bengal and the Joint Commissioner, Commercial Taxes Large tax payers Unit, Government of West Bengal, who were impleaded as the Respondents No. 2 and 3 in the writ petition. The fourth respondent in this appeal and the first respondent in the writ petition is the State of West Bengal represented by the Secretary, Department of Finance, Government of West Bengal who has been shown as the proforma respondent in this appeal. 2. The writ pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the petitioners the amounts so refunded within 15 days from the date of receipt of such amount by the Respondent State Government of West Bengal subject to proper indemnification by the petitioners and the Respondents State Government of West Bengal. The following facts to suffice to decide this appeal. 3. The writ petitioner is a registered dealer under Section 7 of the Central Sales Tax Act, 1956 (The CST Act), in the State of Jharkhand and are engaged in the business of manufacturing and mining. The writ petitioner purchased HSD from IOCL by way of interstate sales from the State of West Bengal to the State of Jharkhand. Prior to 01.07.2017, the writ petitioner was issued Form "C" declaration by the State of Jharkhand which was submitted to IOCL, who in turn submitted the same to the prescribed authority in the State of West Bengal to claim concessional rate of tax in terms of Section 8 of the CST Act. With effect from July 1, 2017 the definition of "goods" as defined under Section 2(d) was amended by Taxation Law (Amendment) Act, 2017. On October 11, 2017, the State of Jharkhand issued a circular stating that Form "C" declaration will no longer be issued to dealers if the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claration for the purchases effected during the relevant period. The writ petitioner was also issued provisional credit notes/credit notes by the IOCL. The writ petition which was filed by the writ petitioner herein before the High Court of Jharkhand, challenging the circular dated October 11, 2017 was allowed and the circular was quashed by judgment dated August 28, 2019. In the said judgment, the Court observed that pursuant to the interim order passed in the writ application Form "C" declaration having been issued to the writ petitioner and provisional credit notes have also been given by the IOCL, to the writ petitioner and that being an admitted case, it was held that the provisional credit notes given to the writ petitioner shall be given effect to, or in any case in which the provisional credit notes have not been given, the required refund shall always be given to the writ petitioner. Further it was observed that if the respective oil companies have made deposit to the state exchequer, they shall also be entitled to claim the refund thereof. 6. The assessment in the case of IOCL was completed by order dated June 30, 2020 disallowing the claim for concessional rate of tax f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the High Court of Gujarat in the aforementioned matter. 7. The writ petitioner filed representation dated December 29, 2020 to the appropriate authority to refund excess amount of CST collected by the State of West Bengal for the period from 01.04.2017 to 31.03.2018 through IOCL who had sold the goods against Form "C" declaration to the writ petitioner which can only be at the concessional rate of tax as against the full rate of tax wrongly collected. It appears that the representation was not considered and the writ petition was filed before this Court by M/s. Tata Steel Limited for the aforementioned relief. The said writ petition along with the other connected matters was allowed by common order dated December 6, 2021 which is impugned in this appeal. The learned Single Bench framed nine issues which in the opinion of the Court was both factual and legal. The issues were elaborately framed which have been concisely reframed by the learned Advocate General in the following terms:- Issues:- (i) Locus Standi of the writ petitioner/purchasing dealer to maintain the writ petition for refund of excess CST collected by IOCL and remitted to the Government of West Bengal. (ii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of West Bengal as the purchasing dealer has no liability to pay tax under the CST Act as it is the only liability of the seller, IOCL; liability of the purchasing dealer arises out of the contract with the selling dealer and there is no statutory liability on the purchasing dealer as the selling dealer may or may not chose to recover the taxes paid by him from the purchasing dealer; it is only a selling dealer who is given the privilege of concessional rate of tax by virtue of Section 8(1), 8(3) and 8(4) of the CST Act; the selling dealer does not act as agent of the State of West Bengal for collection of tax. Referring to Section 6,7,8 and 9 of the CST Act, it is submitted that there is no liability imposed on the purchasing dealer under the CST Act and the concessional rate of tax in terms of Section 8 is given only to the selling dealer and there is no right recognized in favour of the purchasing dealer. Similarly, Section 9 of the Act provides for levy and collection of tax only from the selling dealer. 10. Referring to Section 60 of the West Bengal Sales Tax Act (WBST) and Section 62 of the West Bengal Value Added Tax Act (WBVAT), it is submitted that those provisions prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purchaser to pay sales tax, nor does it require the seller to pass on sales tax liability to the purchaser. Further, it was submitted that in M/s. George Oakes Private Limited, it has been held that merely because a dealer is unable to pass on the tax does not mean that the tax is imposed by the Government on the purchaser or that the seller is a mere collecting agency for the Government. 14. It is further submitted that the learned Single Bench had also referred to Section 37 of the WBST Act and held that the purchasing dealer is entitled to maintain a claim for refund before the Commissioner. It is submitted that Section 37 is not applicable to the facts of the case as the case on hand does not relate to excess tax paid to the authority. The said provision relates to excess amounts collected by the selling dealer from the purchaser in contravention of the provisions of the act and not deposited to the authority as tax and only in those situations the selling dealer is obligated to deposit the excess amount collected to the RBI or the Government Treasury and only after such deposit the purchasing dealer can apply for refund of this excess amount. Therefore, it is contended t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Reliance was placed on the decision in Saraf Trading Corporation and Others Versus State of Kerala (2011) 2 SCC 344 wherein it was held that only a person entitled under the law to claim a refund can do so. In the said decision, the Hon'ble Supreme Court was considering Section 44 of the Kerala General Sales Tax Act, 1963 which is similar to Section 60 of WBST Act. The Hon'ble Supreme Court held that a purchasing dealer would not have right to claim a refund when the statute allows the refund to be made only to the selling dealer and the Court will not take a pro-active stance and grant refund to a purchasing dealer de hors the provisions of the statute, even though the burden of tax may have been passed on by the selling dealer to the purchasing dealer. Therefore, it is submitted that in terms of Section 60 of the WBST Act only the selling dealer is entitled to claim refund. Therefore, it is submitted that the decision in Saraf Trading Corporation is clearly applicable to the case on hand. 18. The learned Advocate General to support the argument that taxing authority is only concerned with the assessee and not any other third party with whom the assessee may have contractual rela ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntitled to recover tax from the sales tax authorities in West Bengal or that the State authority is under an obligation to refund the tax collected from the writ petitioner. This aspect was clarified in the order passed by the Court in the review application stating that it is only the oil companies that are entitled to claim refund. In any event, the decision of the High Court of Jharkhand is not binding on the State of West Bengal as it was not a party to the said proceedings. To support the contention that the decision will not bind a non-party to the litigation, reliance was placed on the decision in Census Commissioner Versus R. Krishnamurthy (2015) 2 SCC 796 and Kulwant Singh & Others Versus Daya Ram & Others (2015) 3 SCC 177. 24. Further it is submitted that the decisions of the other High Courts are not applicable in the case on hand for several reasons and more particularly, have not taken into consideration the decisions of the Constitution Bench of the Hon'ble Supreme Court in Tata Iron and Steel Company Limited and George Oakes Private Limited. It is further contended that the decision of the Hon'ble Supreme Court in Commissioner of Commercial Taxes Versus Ramco Cement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the proposition that a concession can be claimed strictly in the manner provided for in the statute, reliance was placed on the decisions of the Hon'ble Supreme Court in India Agencies (Regd.) Bangalore Versus Additional Commissioner of Commercial Taxes, Bangalore (2005) 2 SCC 129 and Ald Automative Private Limited Versus Commercial Tax Officer now upgraded as Assistant Commissioner (CT) and Others (2019) 13 SCC 225. It is further submitted that the learned Writ Court has not held that IOCL has not claimed the concessional rate of tax in terms of the provisions of the statute. 30. For the proposition that assessment order can be set aside only by following the provisions of the statute, reliance was placed on the decisions of Hon'ble Supreme Court in State of Madhya Pradesh Versus Haji Hasan Dada AIR 1966 SC 905 and Sales Tax Officer, New Delhi Versus East India Hotels Ltd. And Anr. (1988) 9 SCC 662. 31. It is submitted that Act nowhere provides that the purchasing dealer would be entitled to the concessional rate automatically by submission of Form "C". The decision in the State of Tamil Nadu Versus Arulmurugan and Company is also to the said effect. Such an argument proceeds on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on on the State. 35. With regard to the finding of learned Writ Court that Article 265 of the Constitution was violated, that withholding the excess tax would amount to unjust enrichment for the State of West Bengal and therefore would justify granting relief under Article 226 of the Constitution, it is argued by the learned Advocate General that Article 265 would not stand in the way if refund of tax would unjustly benefit the assessee (IOCL) who has already passed on the burden of such tax. It is on the person claiming refund to establish that he has not passed on such burden of tax. In this regard, reliance was placed on the decision of the Hon'ble Supreme Court in Mafatlal Industries and Others Versus Union of India (1997) 5 SCC 536. 36. Further it is submitted that there is no question of unjust enrichment of the State. The benefit being a concession could be claimed upon strict compliance of the conditions. That apart, it is only IOCL who can claim such concession and not the writ petitioner. 37. With regard to the order directing payment of interest, it is submitted that interest on refund should strictly confirm to Section 34, and modification of the period of charging i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) 1 SCC 540. 40. It is submitted that Section 30(2) of WBST Act stipulates the period for filing a return and Section 30(6) for filing revised return, and by the time Form "C" declaration became available to the writ petition the time stipulated to file revised return had long expired. The law does not compel an impossibility (Cochin State Power and Light Corporation Limited Versus State of Kerala AIR 1965 SC 1688). Further by placing reliance on the decisions of the Hon'ble Supreme Court in Deputy Commercial Tax Officer, Park Town Division, Madras & Another Versus Sha Sukraj Peerajee 45 and Commercial of Wealth Tax, Meerut Versus Shravan Kumar Swarup & Sons (1994) 6 SCC 623, it is submitted that filing of returns is only a part of machinery provision and cannot override the substantive claim of concessional rate of tax. 41. For the proposition that the purpose of assessment proceedings before the assessing authority is to correctly assess the tax liability, reliance was placed on the decision in National Thermal Power Company Limited Versus Commissioner of Income Tax (1997) 7 SCC 489, Jupiter International Limited Versus The Senior Joint Commissioner Sales Tax (2014) SCC Online ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it petitioner. The State has stated that the writ petitioner is not a dealer, it cannot file a statutory appeal against the assessment order of IOCL. IOCL has taken a stand that the writ petitioner can pursue its claims against the State of West Bengal. Thus, the writ petitioner cannot be left without a legal remedy and cannot be driven from one forum to another. To support such argument, reliance was placed on the decisions of the Hon'ble Supreme Court in Union of India Versus Hindalco Industries (2003) 5 SCC 194, and Ghanshyam Mishra and Sons Private Limited Versus Edelweiss Asset Reconstruction Company Limited & Others (2021) 9 SCC 657. 45. The following decisions were relied on for the proposition that payer of tax is entitled to challenge the excess levy/collection of tax. * I.D.L Chemicals Limited Versus Union of India & Others (1996) 5 SCC 373 * Jharkhand State Mineral Development Corporation Limited Versus Central Coalfields Limited & Others in WP (C) No. 3318/2018. * Indian Explosives Limited Versus Commissioner, Sales Tax, U.P. & Others (1975) SCC Online All 503 46. To support the argument that the appeal remedy availed by IOCL is illusory as already the first app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction would not be permissible. Thus, this Section clearly points out that tax received by seller is not part of turnover unlike the cases in George Oakes and Central Wines. 49. It is further submitted that Section 9A of the CST Act mandates that the seller will not make any collection of tax except in accordance with the Act and the Rules made thereunder. This collection of tax by the seller from the buyer is clearly contemplated. If the purchasing dealer produces Form "C", the selling dealer is obligated to collect only a concessional rate of tax. If the seller contravenes Section 9A, he would be visited with penalty under Section 10(f) of the CST Act, similarly if the buyer contravenes any of the provisions relating to the goods purchased at a concessional rate penalty is attracted under Section 10(a) to 10(e) of the CST Act. A combined reading of the aforesaid provisions clearly shows the CST Act contemplates the passing of the burden of tax to the writ petitioner by IOCL. In such an eventuality, the recovery of tax by IOCL is only as an agent of the State of West Bengal. In this regard, reference was made to paragraph 12 of Central Wines. Reliance was also placed on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs from whom it was collected. Reliance was also placed on the decision of the West Bengal Taxation Tribunal in Steel Authority of India Versus ACCT, Durgapur MANU/ST/0016/2007, wherein among other things it was held that buyer can certainly move an application to the Commissioner for refund of the excess tax deposited and the State of West Bengal would be obliged to refund the excess tax collected by the buyer. 55. Distinguishing the decision in Saraf Trading Corporation, it is submitted that in the said decision Section 44 of the Kerala General Sales Tax Act, 1963 was considered which is materially/significantly different from Section 37(3) of WBST Act. It is submitted that learned Advocate General referred to Section 46A(2) of the Kerala General Sales Tax Act which provision was not considered in Saraf Trading Corporation. In Corporation Bank, it was held that the buyer was entitled to refund however, this decision was not noticed in Saraf Trading Corporation. On the similar issue as to the entitlement of buyer maintain a claim for refund the decision of the High Court of Gujarat in J.K. Cements Limited Versus State of Gujarat in Special Civil Appeal No. 15333 of 2019 dated 18. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udgment of any court nor does it interprets the scope of any statutory provision. The State of Jharkhand did not accept the Circular as is evident from the judgment in Tata Steel Limited, Jamshedpur, the Hon'ble Court therefore, interpreted Section 2(d) and 8(3) of the CST Act to hold that the writ petitioner was entitled to Form "C". Furthermore, the State of West Bengal by Circular dated 07.08.2018 directed the continuance of issue of Form "C" as was done prior to 01.07.2017, though other state governments declined to issue Form "C" after 01.07.2017, therefore the present stand taken by the state of West Bengal in these proceedings is diametrically opposite to what was taken earlier. With the above submissions Mr. Gulati concluded. 59. Mr. Khan, learned Counsel for IOCL, while adopting the submissions of Mr. Gulati, submitted that before 01.07.2017 there was no dispute about the entitlement of the writ petitioners, it is only after the amendment to the definition of "goods" in Section 2(d) of the CST Act, dispute arose. The Circular issued by the State of Jharkhand was challenged by the writ petitioner was quashed by the High Court of Jharkhand by order dated 28.08.2019 and dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s borne the burden. The appropriation of the money by the state of West Bengal would be hit by Article 265 of the Constitution. It is submitted that the argument as advanced by the state of West Bengal before this Court is similar to the argument made by state of Gujarat in the case of J.K. Cements which was rejected by the High Court of Gujarat and refund was allowed to the buyer. 63. Mr. Khan, placed reliance on the judgment of the Hon'ble Division Bench of the High Court of Mysore at Bangalore in Giridharlal Parasmal Versus the State of Mysore (1967) 20 STC 64 and referred to paragraph 6 wherein it was pointed out that the duty of the assessing officer is not merely to impose tax that is lawfully excisable but also to give the assessee the benefit of any reduction or exemption that may become due to them upon facts actually found to be true by the assessing authorities, whether or not the assessee out of ignorance or by mistake, make a claim thereto, when the mistake is so obvious and the matter is taken up on appeal, it is the duty of the appellate authorities to correct the mistake. 64. It is submitted that several purchasers like the writ petitioners have paid excess tax, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Development Corporation Limited Versus Central Coalfield Limited and Others in WP(C) No. 3318 of 2018, High Court of Jharkhand and Indian Explosives Limited, it is submitted that the obligation to pay tax was on the buyer. 69. It is reiterated that the circular dated 01.11.2018 is only a direction to the states where the purchasing dealers are situated and cannot be construed as a direction where the purchasing dealer is situated, hence cannot be construed as a direction to the State where the selling dealer is situated and in no way relates to the locus of the purchasing dealer to maintain an action for refund against the seller's state. The decision in Tata Chemicals relied on by the writ petitioner for grant of interest on the refund, is sought to be distinguished by contending that in the said case the Hon'ble Supreme Court was dealing with the specific language of Section 244A of Income Tax Act, 1961, which is different from Section 34 of the WBST Act. Section 244A of the Income Tax Act, 1961provides for interest calculation from the date of payment of tax, whereas there is no such provision in Section 34 of WBST Act, therefore no interest is payable. It is further submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e applicable to the sale or purchase of such goods inside the appropriate state under the Sales Tax Law of that state, whichever is lower. In terms of the proviso, the Central Government may by notification in the official gazette reduce the rate of tax under Sub-Section (1). Sub-Section (2) of Section 8 states that the tax payable by any dealer on his turn over in so far as the turn over or any part thereof relates to the sale of goods in the course of interstate trade or commerce not falling within Sub-Section (1) of Section 8, shall be at the rate applicable to the sale or purchase of such goods inside the appropriate state under the Sales Tax Law of that state. The goods referred to in Sub Section 1 of Section 8 of the Act on which the liability to pay tax arises have been enumerated under Sub-Section 3 of Section 8. Sub-Section (4) of Section 8 states that the provisions of Sub Section (1) shall not apply to any sale in the course of interstate trade or commerce unless the dealers selling the goods furnishes to the prescribed authority in the prescribed manner a declaration duly filled and signed by the registered dealer to whom the goods are sold containing the prescribed par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the invoices and not issued credit notes to the writ petitioner. Therefore, it is to be seen that whether there is a necessity for IOCL to file a revised return so as to enable the assessing officer to take note of the Form "C" declaration and levy concessional rate of tax. A combined and conjoint reading of Section 8(4) of the CST Act and the proviso to Rule 12(7) of the CST rules shows that the necessity to file revised return does not arise. 74. In Arulmurugan and Company, the question which was referred for the decision before the Full Bench was whether the appellate authority can entertain Form "C" declarations filed by the registered dealer at the appellate stage either under the CST Act or the Rules made thereunder. While answering the question, it was held that the proviso in the Act simply says that "C" Form shall be filed before the prescribed authority either within the prescribed time or within such further time as that authority may for "sufficient cause", permit. It was pointed out that as a matter of construction of the proviso in the statute, if there is "sufficient cause" further time will have to allowed. The proviso to the section does not insist that the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he setting aside of the assessment the whole thing is once again at large. 75. In Gujarat Ambuja Cement Limited, the Hon'ble Supreme Court pointed out that under Rule 12(7) of the CST Rules, the declaration forms can be filed at a subsequent point of time and not necessarily along with returns. On application being made before the assessing authority, the exemption can be granted. It was held that the object of the rule is to ensure that the assessee is not denied the benefit which is available to it under law on a technical plea and the assessing officer is empowered to grant time which means that the provisions requiring filing of declaration forms "C" along with the return is a directory provision and not mandatory provision. The declarations forms can be filed before the appellate authority as an appeal is continuance of the assessment proceedings. The appellate authority if satisfied that the assessee was prevented by reasonable and sufficient cause which disenabled him to file the forms in time it can be accepted. It can also be accepted as additional evidence in support of the claim for reduction. On the facts of the said case, it was noted that the company had made a speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e other than purpose mentioned in the certificate in form "C". It was further held that if the purchasing dealer holds a valid certificate the goods which are to be purchased and furnished and furnishes the required declaration to the selling dealer the selling dealer becomes on production of the certificate entitled to the benefit of Section 8(1) of the Act. 77. In M/s. Hyderabad Asbestos Cement Production Limited, after examining the provisions of the Act and the rules particular Sub Rule (7) of Rule 12, it was held that Form "C" shall be furnished up to the time of assessment by the first assessing authority but in the proper case the prescribed authority which would mean to be the assessing authority may permit such forms to be filed within further time as he may permit and this necessarily means that the assessing authority will complete the assessment but at the same time permit the dealer to file form "C" within time specified by him. It was further held that in case, the dealer files form C within the time specified, it is obvious the assessing authority will revise the order of assessment granting the requisite relief. 78. The legal principle that can be culled out from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, we have no hesitation to hold that the reason for not accepting the Form "C" declaration was wholly untenable. While on this issue we need to consider as to whether the appellants could have not suited to the claim for concessional rate of tax on the ground that revised return have not been filed by IOCL. Section 30 (2) of the WBST Act prescribed the period for filing the return and Sub-section (6) of Section 30 prescribed the time limit for filing the revised return. Admittedly on the date on which the Form "C" declaration was filed before the assessing authority of IOCL, the time stipulated for filing revised return under Section 30(6) had expired. If that be so can IOCL be compelled to do an act which is legally impermissible and impossible to perform. The Hon'ble Supreme Court in Cochin State Power and Light Corporation Limited applied the maxim lex non cogitia ad impossible and held that the performance of an impossible duty must be excused. Therefore, on this ground also the appellants were wholly unjustified in taking a stand that IOCL ought to have filed revised return. In any event filing of a return is a procedural aspect forming part of the machinery provision und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on was given where as a result of judicial decision it was found that a non-taxable item was taxed or an impermissible deduction was denied. It was pointed out that in such circumstances the assessee should not be prevented from raising that question before the tribunal for the first time so long as the relevant facts are on record in respect of that item. Reference was made to the decision in Jute Corporation of India Limited Versus Commissioner of Income Tax (1991) 187 ITR 688, wherein while dealing with the powers of the Appellate Assistant Commissioner it was observed that an appellate authority has all the powers which the original authority may have in deciding the question before it subject to the restrictions or limitations if any prescribed by the statutory provisions. 81. In Goetze (India) Limited, the assessee claimed a deduction under provision of the Income Tax Act after filing the return. The deduction was disallowed on the ground that there is no provision under the Income Tax Act to make amendment in the return of income by modifying the application at the assessment stage without revising the return. The assessee therein filed appeal before the Commissioner (Appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot filing a return or the revised return raising that the transactions done by them cannot be considered as a sale of business. After noting several decisions including the decision in Goetze India Limited it was held that failure to advert to the claim in the original return or the revised return could not denude the appellate authorities of their power to consider the claim if the relevant material was available on record and was otherwise tenable in law. In Commissioner of Income Tax Versus Perlo Telecommunication and Electronics Components India Private Limited MANU/TN/6874/2021 it was held that the power of tribunal under Section 254 of the Income Tax Act, 1961 cannot be curtailed, after referring to the decision in Goetze (India) Limited and the facts of the case it was noted that the assessee therein was only claiming expenditure which was left out at the time of filing of original income tax return and noting that the assessing officer has power to make upward or downward adjustment in the income return filed by the assessee and when the assessee had not claimed certain expenditure clearly evident from the records and it comes to the knowledge of the assessing officer at th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... review petitioners to approach the appropriate forum for the required relief. As pointed out earlier in Capro Power Limited Versus State of Haryana (2018) VIL 154 P&H, the assessee similarly placed to that of the writ petitioner before us challenged the orders of the State of Haryana refusing to issue form C declaration in respect of natural gas purchased by them in the course of interstate trade or commerce and used by it for generation of electricity. The said writ petition was allowed holding that the state of Haryana was liable to issue Form "C" declaration in respect of natural gas purchased by the petitioners therein from the oil companies in the State of Gujarat and used in the generation or distribution of electricity at its power plant in Haryana. Further it was observed that in the event the petitioners therein had to pay oil companies any amount on account of the wrongful refusal of Form "C" declaration, the writ petitioners therein shall be entitled to refund and/or adjustment of the same from the concerned authorities, who collected the excess tax through oil companies or otherwise. The special leave petition filed against the said decision in SLP C No. 20572 of 2018 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Government dated 01.11.2018 directs the State of West Bengal to follow the decision in Capro Power. The state Government being as an agent of the Central government for levy and collection of Central Sales Tax is bound by the circular. The State of West Bengal did not question the circular issued by the Central Government dated 01.11.2018 in such factual scenario it is specious plea raised by the State of West Bengal before this Court stating that the circular would not bind the State Government and at best the circular is only understanding of the decision of the Court. The State of West Bengal cannot be heard to take such a stand because the decision which was directed to be followed in the circular was upheld by the Hon'ble Supreme Court and has become a binding legal precedent. The delegatee cannot over step or supersede the delegator and this being an elementary principle, the State of West Bengal cannot and could not wriggled out of their obligation in following the decision and continuing to accept the Form "C" declaration submitted by the selling dealers. After the legal issue had settled down and the state of Jharkhand issued Form "C" declaration to the writ petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to do the impossible. Therefore, the stand taken by the appellant and the State of West Bengal is liable to be outrightly rejected. 84. Learned Advocate General had elaborately made submission with regard to the locus standi of the appellant to file the writ petition. The contentions advanced by the learned Advocate General have been set out by us in the preceding paragraphs. It is not in dispute that the selling dealer IOCL has passed on the tax burden to the purchasing dealer, the writ petitioner. The writ petitioners have specifically averred in the writ petition that they have not passed on the tax burden. As rightly pointed out by Mr. Gulati, the appellants have not specifically denied or disputed such an averment in their affidavit in opposition. That apart in the present appeal writ petitioner has filed an affidavit of their chartered accountant affirming that the tax burden has not been passed on by the writ petitioner to their customers. Therefore, the appellant and the state cannot raise any contention in this regard nor attempt to plead the theory unjust enrichment qua the writ petitioners. 85. In India Council for Enviro-Legal Action, the concept of unjust enrichme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the Rajasthan High Court seeking refund of the said amount of excess tax paid. The writ petition was allowed. Aggrieved by the same, the state preferred the appeal before the Division Bench which was dismissed and the said decision was upheld by the Hon'ble Supreme Court. Subsequently Form "C" declarations were issued by the State of Rajasthan to the petitioner therein. IOCL informed the petitioner therein that they have deposited the tax with the Haryana Sales Tax Department and they should approach the concerned department for refund of the tax paid by the petitioner therein. Pursuant there to, they approached the authorities in Haryana claiming refund which came to be rejected on the ground that excess tax can be refunded only to those to whom it was charged as per the provisions of the Haryana Value Added Tax Act, 2003. Challenging the said order, the writ petition was filed. The writ petition was allowed and refund was directed to be granted to the petitioner, purchasing dealer. The operative portion of the judgment is as follows:- * It is not disputed that the Petitioner/Company has furnished proof of bearing the burden of the excess tax to the respondent authorities. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eading of the above-said judgment, it can be safely concluded that the HSD has been purchased by the Petitioner/Company from Indian Oil Corporation in the course of inter-State trade for use in mining activities and therefore, the question of passing of the tax burden to anyone would not arise and the respondent authorities are not justified in not processing the refund claims of the Petitioner/Company. In view of the above-said discussions, the present writ petition is allowed. The respondents are directed to process the refund claim of the petitioner and grant refund of the tax amount collected from the petitioner an deposited by the seller in accordance with law within a period of four (4) weeks from the date of receipt of certified copy of this judgment. However, it is made clear that once the refund claim of the petitioner is processed, Indian Oil Corporation would not be entitled to claim any such refund. 86. The Learned Advocate General referred to the decision in Tata Iron and Steel Company Limited for the proposition that the liability to pay tax is on the seller, consequently, the question of seeking for refund of tax by the writ petitioner, purchasing dealer does not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er liable to pay tax and there is no liability on the buyer. Section 8 provides for concessional rate of tax to be given only to the seller and there is no right recognized in favour of the buyer and Section 9 provides for levy and collection of tax only from the seller. Section 60 of the WBST Act and Section 62 of WBVAT Act provide for refund of excess tax only to be paid to the dealer who was paid such excess tax under the Act namely the selling dealer and there is no right of the purchasing dealer recognized by the statute to claim refund. 87. Thus, we are required to examine as to whether the decisions which was referred to by the learned Advocate General more particularly the decision in George Oakes and Central Wines could be applied to the facts and circumstances of the case on hand. George Oakes (Private) Limited where dealers in motor cars, spare parts and accessories, for the years 1951-1952 and 1952-1953, they submitted their return and claimed exemption from tax with regard to the certain amount realized on transactions of sales which the appellant therein contended as interstate sales and hence exempt from tax under Article 286 of the Constitution as it stood at the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stitutional validity of statute which did not contain a definition for "sale price". Secondly, in paragraph 14, the observation made by the Hon'ble Supreme Court that distinction between the two amounts, tax and price loses significance is from the point of view of legislative competence. Therefore, the decision in George Oakes cannot be made applicable to the case on hand. In Central Wines, the Court was examining the question whether the amount collected by the seller from the buyer which comprises of two components the actual sale price and the sales tax is a part of turnover and comes within the expression "any other sum charged by the dealer whatever be the description, paid or object thereon" occurring in Section 2(s) of the Andhra Pradesh General Sales Tax Act, 1957. While examining the provisions of the said Act, it was held that the dealer under the said Act who sells the goods does not act as agent of the state in collecting sales tax from the person to whom he sells the goods because the act does not cast any obligation on the purchaser of the goods to pay any tax and therefore what is collected by the vendor from the vendee by way of consideration for passing the proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of tax collected by a registered dealer, in accordance with the provisions of the Act, has been otherwise deducted from the aggregate sale prices. Thus, the proviso prohibits a second deduction from being made. The scheme of the CST Act and in particular by a conjoined reading of Section 2(j) with Sections 8 and 8A clearly shows that the tax received by the seller under the CST Act does not form part of the turnover. This is a very important and distinguishing feature in the scheme of the CST Act which would lead us to hold that the decision in George Oaks P. Ltd. and Central Wines can have no application to the facts of the case. The above aspect is further clear from a reading of Section 9A of the Act which deals with the collection of tax to be only by registered dealers. It states that no person who is not a registered dealer shall collect in respect of any sale by him of goods in the course of Inter-State Trade and Commerce any amount by way of tax under the CST Act and no registered dealer shall make any such collection except in accordance with the Act and the Rules made thereunder. If the dealer violates the said provision penalty is imposed under Section 10(f) of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statute, no private person can claim to retain or to enjoy an undue benefit. Doctrine of unjust enrichment is of universal application. It applies even to the state. State is also under an obligation to return any unlawfully or unauthorized realized tax, penalty of interest to the person who has actually paid the same. But as the State holds and spends money lying with it for public interest every individual in the State is directly or indirectly benefited by State expenditure. Unjust enrichment of the State, if any, is in the ultimate analysis, for the benefit of the public at large. Private unjust enrichment serves only private interest. Unjust enrichment of private persons is to be avoided. Enrichment of the State, even if unjust, is preferred to unjust enrichment of private persons so long as the person who has paid the money does not claim or demand it. Once the person from whom tax has been actually collected comes forward, demands within prescribed time and proves that he/it has paid the tax found to be not payable, State is under an obligation to refund or adjust, as the case may be. 11. Although Section 37 is not strictly applicable those buyers from whom tax has been c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x has been paid by the assessee himself/ itself or the assessee has deposited such excess tax after realizing the same from customers/ buyers, shoo were at the time of realization, liable to pay such tax. If it is found that excess tax has been paid by the assessee itself out of its own fund, the concerned authority will pass appropriate order in accordance with Section 60 of the 1944 Act. (ii) In cases where the assessing authority finds that excess tax or non- payable tax has been realized from buyers or customers, he will direct the assessee to submit a statement disclosing particulars of the buyers/ customers from whom such tax has been realized but who, because of subsequent developments, ceased to be liable to pay such tax, including their registration numbers, amounts realized from them and to produce documents in support of the statement. (iii) In cases where the assessee has realized the tax amount from buyers/ purchasers the assessing authority will mention in the assessment order the names of such buyers/ purchasers who are entitled to get actual refund if necessary particulars are made available. (iv) The assessing authority will direct the assessee to communicate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case maybe. Such instances would no present with any difficulty. (2) Where there is provision in statute enabling the seller to collect tax and to pass the same onto the Government, the seller acts as if he were acting as an agent of the Government. The amount so collected would not form part of sale price or turnover. (3) Where there is provision in the Sales Tax Statute, permitting a seller to pass on the sales tax to the purchases, the amount collected as sales tax would not form part of the sale price or the turnover. (4) Where the sales tax statute is silent on the point, the amount so collected would form part of the sale price or the turnover. The matter was elaborate considered by the Andhra Pradesh High Court. After reviewing many a cases on the topic, both foreign as well as Indian, both of Supreme Court and other High Courts, the said Andhra Pradesh High Court observed as below:- "What is deductible from these decisions and in fact uniformly laid down is that the burden of paying sales tax is on the "dealer". If any tax is levied by a particular enactment on the purchaser and if such tax is collected by the dealer at the time of sale specifically showing th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... again substituted by Notification No. G.S.R. 770, dated 2nd June, 1961, and the provision for exclusion of tax collected again came in on the basis of the same formula. If, however, sales tax was separately charged in the relative bill, the amount so charged by way of sales tax could itself be deducted without the application of the formula. Later by Section 5 of the Central Sales Tax (Amendment) Act, 1969, Section 8A was introduced, with retrospective effect, in the principal Act providing the same formula for effective deduction of the tax- element from the sale-price for the purpose of avoiding tax on tax. As a result, rule 11(2) was omitted by Notification No. G.S.R. 1362, dated 9th June, 1969. 92. The above exposition clearly supports the argument of Mr. Gulati. The decision in Giridharlal Parasmal referred to by Mr. Khan in no uncertain terms holds that the duty of the assessing officer is not merely to impose tax that is lawfully exigible but also to give to the assessees the benefit of any reduction or exemption that may become due to them upon facts actually found to be true by the assessing authorities, whether or not the assesses out of ignorance or by mistake make a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect of any sale of goods by him, any amount of tax under this Act, and no dealer, who is liable to pay tax under this Act, shall make any such collection except in accordance with the provisions of this Act or in excess of the amount of tax payable by him under this Act. Provided that the provisions of this sub-section shall not apply to any dealer who avails of the benefit of exemption from payment o tax under section 39 or the benefit o remission of tax under Section 41, Section 42 or Section 43. (2) If any dealer contravenes the provisions of sub- section (1), he shall, notwithstanding anything contained elsewhere in this Act, deposit the amount collected by way of tax or the amount collected by way of tax in excess of the amount payable under this Act, as the case may be, into a Government Treasury or the Reserve Bank of India within thirty days from the date of such collection and intimate the Commissioner of such deposit along with a receipt from such Treasury or Bank showing payment of such amount. (3) The Commissioner shall, on application made by the buyer in respect of sales of goods to him referred to in sub-section (1) and on such terms and conditions as he may de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioner and deposited by IOCL to the State of West Bengal is a tax in excess of the amount payable as tax and if that be so Section 37 could be applied. While on this issue it is beneficial to refer to the decision of the Constitution Bench in R.S. Joshi. The core of the dispute in the said case was whether it was permissible for the State Legislature to enact a law to the effect that sums collected by the dealers by way of sales tax who are not exigible under the State law, but prohibited by it, shall be forfeited to the public exchequer punitively under Entry 54 read with Entry 64 of List 2 of the Constitution. The Hon'ble Supreme Court was examining the Bombay Sales Tax Act, 1959 and in particular, Section 46 of the said Act which we find to be in para materia with Section 37(1) of the WBST Act, as also Section 46 of the said Act is para materia with Section 37(2) of the WBST Act, held as follows: In a developing country, with the mass of the people illiterate and below the poverty line and most of the commodities concerned constitute their daily requirements, we see sufficient nexus between the power to tax and the incidental power to protect purchasers from being subjected t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o as to enable an entrepreneur to get undue advantage to the effect that he would collect tax from the cinema-goers and appropriate the same. When a person collects tax illegally, he has to refund it to the taxpayers. If the taxpayers cannot be found, the court would either direct the same to be paid and/or appropriated by the State. 97. The learned Advocate General referred to Section 6 of the CST Act and submitted that only a selling dealer is liable to pay tax under the said provision. Reference was also made to Section 60 of the WBST Act and Section 62 of the WBVAT Act and submitted that under those enactments as well, it is only the selling dealer who has paid excess tax is entitled for refund. Reliance was placed on the decision in Saraf Trading Corporation and submitted that the Hon'ble Supreme Court has held that only a person entitled under law to claim the refund can do so. It is submitted that in the said case the Hon'ble Supreme Court was considering Section 44 of the Kerala General Sales Tax Act, 1963 which is similar to Section 60 of the WBST Act and it was held that the purchasing dealer would have no right to claim a refund when the statute allows the refund to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erala General Sales Tax Act which clearly rules that it is only the dealer on whom the assessment has been made can claim for refund of tax and no one else. The learned Advocate General had also referred to Section 46A(2) of the Kerala General Sales Tax Act and submitted that the provisions is similar to Section 37(3) of the WBST Act. Mr. Gulati is right in his submission that if Saraf Trading Corporation the Hon'ble Supreme Court was only considering Section 44 of the Kerala General Sales Tax Act as to whether the appellants therein are entitled for refund of tax collected from them at the time of purchase of in view of the provision for refund as contained in Section 44 of the Kerala General Sales Tax Act. We find that the Hon'ble Supreme Court had no occasion to examine Section 46A of the Kerala General Sales Tax Act. Therefore, the said contention cannot be pressed into service by the state. Interestingly, in Corporation Bank, Section 44 of the Kerala General Sales Tax Act was considered and the Court directed refund of the excess tax collected to the purchaser. The decision in Corporation Bank was rendered on 19.11.2008 which decision was not placed for consideration before th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... correct. In such circumstances, the writ petitioner has locus standi to approach the court for seeking refund having borne the burden of tax and therefore the contention advanced by the state in this regard does not merit acceptance. Having held so, the next aspect is the purported concession made by the Government Pleader with regard to the locus of the writ petitioner. We are fully satisfied that in law the writ petitioner had locus to maintain the claim for refund and the same having not been acceded to by the State of West Bengal/appellants was entitled to file the writ petition before this Court. Therefore, in our view the observations made by the learned Single Bench recording the concession stated to have been made by the learned Government Pleader becomes superfluous, be eschewed and accordingly stand eschewed in its entirety. 99. Learned Advocate General contended that the decision in Ramco is of no application to the case on hand. It is his submission that there was no question of law decided by the Hon'ble Supreme Court and the order is simple dismissal of the special leave petition arising from an order passed by the High Court of Madras. It is submitted that at the hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Hon'ble Supreme Court it was held that considering the consistent view of 9 High Courts, including dismissal of special leave petitions by different Benches of the Hon'ble Supreme Court and being satisfied about the exposition on the matters in issue by the High Court of Madras vide impugned judgment and order being a possible view, the Hon'ble Supreme Court declined to interfere with the said order. Furthermore, the Hon'ble Supreme Court noted that after the decision in Capro Power Limited the Union of India has chosen to act upon the said decision by issuing office memorandum dated 01.11.2018 and directing all the States and Union Territory to follow the view taken by the Punjab and Haryana High Court in Capro Power Limited. With these reasons the special leave petitions were dismissed. Therefore, it would be incorrect to state that the special leave petition was a simple dismissal. The reasons assigned by the Hon'ble Supreme Court will clearly show that the law on the subject has been fully settled. It would not be permissible for the State of West Bengal to contend that the decisions which was referred to in Ramco and the decision in Ramco cannot apply to the facts an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... justly benefit the assessee who has already passed on the burden of such tax. Further it is submitted that there is no question of unjust enrichment as the lower rate of tax is only the concession granted by the state which cannot be claimed as a matter of right but strictly in terms of the conditions prescribed for claiming such concession. Further it is only IOCL who can ask for this concession and the writ petitioner cannot claim any right in this regard from the taxing authority. 103. Firstly, we need to mention that the lower rate of tax granted is under a Central Legislation and the State of West Bengal is only an agent of the Central Government to collect the correct rate of tax in accordance with the provisions of the CST Act. It is not disputed by the State of West Bengal that the conditions prescribed for claiming lower rate of tax have not been fulfilled by the writ petitioner. In such circumstances, the right to be assessed at lower rate of tax becomes a vested right and such vested right accrues in favour of the writ petitioner who has borne the burden of tax. Furthermore, the concept of unjust enrichment was dealt with by the High Court of Gujarat in J.K. Cements Lim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... similar submission was repelled by the High Court of Gujarat in J.K. Cements Limited and we borrow the finding rendered by the Court in paragraph 18 of the judgment to reject the argument made on behalf of the State of West Bengal. That apart, we have held that the writ petitioner is entitled to maintain claim for refund and the contention raised on behalf of the State of West Bengal that refund can be claimed only by IOCL has been rejected. In such circumstances, the refund has to be directly made to the writ petitioner and the question of adjusting the same against the tax dues of IOCL would not arise. We are conscious of the fact that there has been long drawn litigation and the period in dispute is from 01.07.2017 to October 2018. There is no dispute for the period prior to 01.07.2017 or post October 2018. Therefore, this Court while exercising jurisdiction under Article 226 of the Constitution is empowered to grant such relief which will ensure finality, considering the facts and circumstances of the dispute before it. The Hon'ble Supreme Court in M Sudakar Versus V Manoharan and Others (2011) 1 SCC 484 held that the power to mould relief is always available to the court poss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 1961, the language of which is different from Section 34 of the WBST Act. While it may be true that the language of Section 244A of the Income Tax Act is quite different from that of Section 34 of the WBST Act, the appellant having erroneously rejected the Form "C" declaration, it goes without saying that retention of the excess tax paid after submission of the Form "C' declaration is unauthorized and unlawful. Therefore, the writ petitioner would be entitled to statutory interest as per the WBST Act, from the date on which the Form "C' declarations were refused to be accepted by the assessing authority of IOCL. We are not convinced to grant interest for the anterior period, i.e. the period commencing from the date of payment of the tax in full. This is so because the issue as to whether Form "C" declaration should be issued or not was subject matter of legal interpretation and attained finality only after the decision of the High Court of Jharkhand. Pursuant to the direction issued by the said court Form "C" declarations were issued by the authority of the State of Jharkhand which were in turn submitted by the writ petitioner to IOCL which were filed before the assessing office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gal having borne the burden of tax which have been collected from the writ petitioner and deposited by IOCL with the Exchequer of the State of West Bengal. (8) The State of West Bengal/ appellants are unjustified in refusing to refund the excess tax as it had been allowing concessional rate to the writ petitioners before and after the disputed period. (9) The circular issued by the Union of India dated 01.11.2018 is binding on the appellants/State of West Bengal as they being the agent of the Central Government for levy and collection of Central Sales Tax and non-refunding of the excess tax collected is contrary to the instruction dated 01.11.2018. 107. In the light of the conclusion which we have arrived at, the order and directions issued by the learned Single Bench stands affirmed and the appellants/State of West Bengal is directed to effect the refund of the excess tax collected directly to the writ petitioner within 45 days from the date of receipt of the server copy of this order together with interest at the statutory rate as stipulated under the WBST Act, from 01.07.2020 that is the day after the date on which the assessment order in the case of IOCL was passed that is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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