Ircon International Limited vs Commissioner of Commercial Taxes, Government of A.P., Hyderabad and Another

V.V.S. Rao, J.—Indian Railway Construction International Limited (IRCON) is fully owned Government of India undertaking. They are engaged in the construction of railway works. The petitioner herein is a registered dealer, i.e., works contractor on the rolls of the second respondent under the Andhra Pradesh General Sales Tax Act, 1957 ("the Sales Tax Act", for brevity). For the assessment years 1997-98, the second respondent completed assessment vide order dated March 30, 2000. It resulted in refund of an amount of Rs. 21,49,319. Even a short period thereafter, on November 17, 2000, the second respondent passed reassessment order u/s 14(4) of the Sales Tax Act. Even after such revision, an amount of Rs. 18,45,309 was to be refunded to the petitioner. Aggrieved by the reassessment order, the petitioner preferred an appeal before the Deputy Commissioner (Appeals) (hereafter called, "the ADC"), which was allowed on March 20, 2001. However, the first respondent revised the order of the ADC u/s 20(1) vide order dated June 12, 2003. The petitioner then filed a special appeal which is pending before this court. Be that as it is, even after the suo motu revision by the first respondent, an amount of Rs. 18,45,309 became refundable. The second respondent accordingly passed a consequential order on September 5, 2003 after providing for tax adjustments for the assessment year 1995-96, notice of final assessment and refund order in form C for an amount of Rs. 17,03,322 informing that an amount of Rs. 17,03,322 is to be refunded in cash to the petitioner.

Even though form C was prepared, it was not given effect. The petitioner then sent representation for actual refund of the amount as per form C dated September 5, 2003. In response thereto, the second respondent passed impugned proceedings. The refundable amount was forfeited on the ground that any refund would amount to unjust enrichment in favour of the assessee. This order is assailed in the writ petition.

A counter-affidavit is filed by the second respondent reiterating the contents of the impugned order.

The counsel for the petitioner would submit that the impugned order forfeiting the refundable amount amounts to revising the Commissioner''s order which is impermissible in law; section 30C(1) of the Sales Tax Act does not empower forfeiture of amount of refund already determined; even if it is construed as empowering the second respondent to forfeit the refundable amount, such forfeiture is beyond the period of three years and is barred u/s 30C(2) and the impugned order amounts to second reassessment which is not permissible u/s 14(4) of the Sales Tax Act. The Special Counsel for Commercial Taxes refutes these submissions.

The counter-affidavit does not dispute or deny the factual matrix. When the assessment was completed, the refundable amount was determined at Rs. 21,49,319. After completion of reassessment u/s 14(4) of the Sales Tax Act, it came down to Rs. 18,44,309 and even after appeal and revision by the Commissioner, the refundable amount as per reassessment did not change. This was also accepted by the second respondent while passing consequential order on September 5, 2003 in pursuance of the order of the Commissioner. Form C for refund was also issued. In such a background, whether the second respondent could have validly passed the impugned order forfeiting the refundable amount of Rs. 17,03,322.

There is no dispute that while completing the assessment, the second respondent ordered refund on the ground that the TDS u/s 5H of the Sales Tax Act was already deducted on ballast and cement and therefore, the tax already paid has to be refunded. This finding remained intact and this stood affirmed by the ADC as well as the Commissioner. Therefore, the principle in Mafatlal Industries Ltd. and Others Vs. Union of India (UOI) and Others, has no application. It is not a case of unjust enrichment at all. A bare perusal of section 30C(1) would support the contention of the petitioner that the power to forfeit the tax provided therein is not attracted in a case of this nature. Further, having already passed reassessment order u/s 14(4) on January 17, 2000, the second respondent could not have passed the impugned order ignoring the order of the ADC and the Commissioner which are binding on him. The impugned order, therefore, is ex facie unsustainable and it is accordingly set aside.

The second respondent shall refund the amount as per form C dated September 5, 2003 within a period of four weeks from the date of receipt of copy of this order along with interest as per section 33E of the Sales Tax Act. The writ petition is accordingly allowed without any order as to costs.