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TMI Blog2023 (7) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... the further assertion that the contractor has filed full returns disclosing this transaction and offering tax is contested. This Court must opine that, given the scheme under Section 47 of the KVAT Act and the circumstances in which the petitioner has deduced TDS and deposited the same notwithstanding the provisions of Section 9(A) of the KVAT Act, there could not have been a forfeiture. The petitioner has repaid the amount deducted as TDS to its contractor on being informed that it could not have deducted any amount as TDS and the contractor has also offered such amount as tax - In the present case, without any detailing, the fourth respondent has only opined that refund is not in accordance with the proceedings dated 11.07.2019. The fourth respondent, unless could explicate in the impugned order dated 12.07.2019 how the proceedings dated 11.07.2019 related to deductions made notwithstanding the provisions of Section 9-A of the KVAT Act, could not have been relied upon the same to conclude that there was a mistake apparent from the record in permitting the refund. This Court is of the considered view that the respondents must refund a sum of Rs. 80,75,720/- in terms of Form ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed the impugned order dated 15.09.2021 forfeiting a sum of Rs. 80,75,720/-. 4. Sri. Ravi Raghavan, the learned counsel for the petitioner, submits that the fourth respondent could not have initiated and sustained rectification proceedings with the order dated 12.07.2019 in view of the provisions of Section 69 of the KVAT Act. The learned counsel argues that the rectification, which would be akin to a review, can be only when there is a mistake apparent from the record, and unless a finding is recorded justifiably that there is a mistake apparent from the record, the fourth respondent could not have assumed jurisdiction. He canvasses that the third respondent in dismissing the appeal has overlooked this essential fact. 5. Sri. Ravi Raghavan next contends that the provisions of Section 47(3) of the KVAT Act could not have been invoked to justify a rectification and withdrawal of Form-185. The provisions of Section 47(3) of the KVAT Act for forfeiture could be invoked only if any amount is collected by way of tax as contemplated under Section 47(1) of the KVAT Act. The petitioner did not collect any tax but on an erroneous understanding of provisions of Section 9-A (1) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtain consequences in the event there is failure to pay such amount. If the amount is paid as contemplated under Section 47(1) of the KVAT Act, there shall be forfeiture [to the extent that the amount is not due as Tax] under Section 47(3) 3 thereof, and the person who has collected the tax, or purporting it to be tax, is discharged of the liability to repay that amount to the person from whom the same is collected with a corresponding right in the person from whom such amount is collected to make an application under Section 47(4) of the KVAT Act for refund. 8. In the event an application is filed under Section 47(4) of the KVAT Act by a person from whom the amount is recovered [but excluding the person who has claimed deduction of input tax on the tax realized from him] and within the time contemplated therein and subject to other conditions, the amount will be refunded if the concerned is satisfied that the claim is valid and admissible 4 . This would be the consequence and the right when amount is paid under Section 47(1) of the KVAT Act or forfeited under Section 47(3) thereof. 9. In the present case, the petitioner, when not obliged to deduct any tax at Source fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eductions made notwithstanding the provisions of Section 9-A of the KVAT Act, could not have been relied upon the same to conclude that there was a mistake apparent from the record in permitting the refund. The relevance of the proceedings dated 11.07.2019 is not brought even in the present writ petition. The third respondent, while exercising the appeal jurisdiction should have considered these aspects before declining the petitioner s appeal, and in the absence thereof, the third respondent s order dated 31.03.2021 cannot be sustained. With the afore, question for consideration is answered in favour of the petitioner and consequentially, the impugned order must be quashed. 13. The petitioner would be entitled for refund in terms of Form-185 which is issued on 11.02.2019 (Annexure-M), but the next question would be whether the petitioner is entitled for any interest, and if it is entitled to interest from the date from which interest must be paid for. Sri. Ravi Raghavan argues that because there is no default by the petitioner or loss to the exchequer, there must be an order for refund of the amount with statutory interest from 11.02.2019, and Sri. Hemakumar submits that the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e manner specified in Section 42. 3. Notwithstanding anything contained in this Act, or in any other law for the time being in force, any amount paid or payable by any dealer under sub-section (1), shall, to the extent it is not due as tax be forfeited to the Government and be recovered from him and such payment or recovery shall discharge him of the liability to refund the amount to the person from whom it was collected. 4. Where any amount is paid or recovered by or from any dealer under sub-section (1) or (3), a refund of such amount or any part thereof can be claimed from Government by the person from whom, it was realized by way of tax provided an application in writing in the prescribed form is made to the Commissioner, within two years from the date of the order of forfeiture, but excluding by a person who is a dealer who has claimed deduction of input tax on the tax realized from him on receipt of any such application, the Commissioner shall hold such inquiry as he deems fit and if the commissioner is satisfied that the claim is valid and admissible, and that the amount so claimed as refund is actually paid or recovered, he shall refund the amount or any part ther ..... X X X X Extracts X X X X X X X X Extracts X X X X
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