Sales Tax – Settlement of Arrears- Order Passed for Refund Prior to Act- Refund Can Not Be Denied, s/s. 8, 9 and 10 of The Tamil Nadu Sales Tax (Settlement of Arrears) Act, 2008.
Facts
The best judgment assessment order was passed on November 30, 1998, which was subsequently revised on March 28, 2002. The respondent filed an appeal in A.P. No. 207/07, and with the sole objective of giving an opportunity to the respondent. The Appellate Assistant Commissioner set aside the assessment order and remanded back the matter to the assessing authority. As directed, after verification of the accounts, the first appellant passed orders of assessment on October 3, 2008 whereby the turnover was revised and it was declared that the respondent had in fact made excess payment of tax of Rs. 9,75,447 and found eligible for refund. Form C confirming the entitlement to refund was also issued on October 3, 2008 itself. The only formality that remained was the issuance of refund voucher and the respondent sent representations for the same. Earlier a notice dated June 27, 2007 was issued by the first appellant to the respondent demanding penal interest u/s. 24(3) of the Act for delayed payment of amount due under the deferral scheme and the same was still pending. Before further action could be taken, the Tamil Nadu Government had promulgated Tamil Nadu Ordinance No. 7 of 2008 and floated the Samadhan Scheme. The Rules commemorating the Ordinance was published in the gazette on October 31, 2008. The respondent approached the second appellant under section 5 of the Scheme for settlement of interest for the assessment year 1996-97 on October 30, 2009. Parallely, since the representations seeking refund did not yield any results, the respondent approached the Madras High Court in W.P. No. 18508 of 2010 and the same was disposed of with a direction to consider the representation dated December 21, 2009 and pass orders, within four weeks from the date ofreceipt of copy of the order. By an order dated September 23, 2010, the claim of refund was rejected on the grounds that any order passed by the assessing authority subsequent to the application for settlement under Samadhan Scheme could not be reopened and the claim was not admissible under sections 9 and 10 of the Tamil Nadu Sales Tax (Settlement of Arrears) Act, 2008. Aggrieved by the same, once again, the writ petition was filed by the respondent alleging, inter alia, that the payment of interest under the Samadhan Scheme will not affect the refund claim, which was alreadydecided by the department and therefore the same will not come within the purview of Samadhan Scheme. Even though, no claim of interest for belated refund was made earlier, the respondent company also claimed interest. The writ petition was partly allowed by single judge with regard to refund. However, therespondent’s claim of interest was not allowed but liberty was given to work out his remedy. The respondent has not preferred any appeal against the portion of the order wherein his claim of interest was negated. The department filed writ before the Division Bench of Madras High Court against the judgment of single judge allowing refund to the respondent company. ‘
Held
Admittedly, the respondent was entitled for refund of Rs. 9,75,447 and the issue to be decided is whether after approaching the department under the Samadhan Scheme, without reference to the referred claim, the right of refund continues or not. Section 9 of the Ordinance or Tamil Nadu Act No. 60 of 2008 providing bar to reopen any proceedings is applicable only in respect of the certificate issued under section 8 of the said act. Section 10 providing for withdrawal of appeal or revision is applicable to the issue pending before the authority must be with the certificate issued u/s. 8 of the Act and that the order of refund must have been made after the application for settlement u/s. 5. In the case before High Court the certificate was issued only with respect to the application of settlement of interest. The bar emphasized under sections 9 and 10 of the Act applicable only if the dealer wants to claim refund of the amount paid under the Samadhan Scheme and not the refund which was ordered before floating of the scheme.
The refund order was passed on October 3, 2008 i.e. even before the date of publication of ordinance. Therefore, no reliance can be placed upon sections 9 and 10 of the Settlement of Arrears Act. Accordingly the High Court dismissed the petition filed by the department and confirmed the order of single Judge allowing refund to the company.
