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Judgment
Justice C.K. Abdul Rehim
With respect to assessment years 2002-2003 and 2003-2004, the petitioner claimed exemption from payment of tax on the purchase turn over of raw materials, on the basis of Ext. P3 notification, since the petitioner is a 100% export oriented unit. The claim was ultimately upheld by this court in Ext. P4 judgment, in ST Rev. Nos. 164 and 172/2009. Consequential modified assessment orders were issued by the 1st respondent, as per Ext. P5 and P6. The exemption as upheld by this court was allowed. However, certain amounts paid by the petitioner during pendency of the challenge, was ordered to be forfeited on the basis that as per Ext. P3 notification, tax if any already paid over to the Government is not liable to be refunded. According to the petitioner, the amount remitted is not any amount of tax paid, but it is the amount remitted only to satisfy the W.P.(C) NO. 10298 of 2010 2 conditions incorporated in interim orders issued by the appellate authority and this court. Payments made pursuant to such orders cannot be construed as tax paid to the Government, is the contention. In the counter affidavit, it is admitted that the petitioner had remitted 50% of the tax as per stay orders issued by the appellate authority, towards the demand for the respective years. It is further conceded that the amounts remitted were forfeited only on the basis that Ext. P3 notification prohibiting refund of tax already paid.
Question to be decided is whether the amount paid to satisfy conditions imposed through interim orders can be considered as tax amount already paid to the Government, as contemplated in Ext. P3. There is absolutely no evidence to show that the petitioner had voluntarily paid any tax nor had admitted the liability for payment of the tax. The amount due is tax alleged to have been payable by the petitioner on the purchase of raw-W.P.(C) NO. 10298 of 2010 3 materials. There is no evidence to show that the tax due has been collected from anybody else. Therefore, I am of the view that the amount already remitted cannot be considered as tax already paid to the Government.
In the decision of the Hon''ble Supreme Court in K.T. Venkitagiri and others V/s. State of Karnataka and others 2003 (9) SCC I, it is held that any party cannot be permitted to retain amounts received directly or indirectly, taking advantage of conditional interim orders, which will amount to unjust enrichment. I am of the view that the amount if any paid by virtue of interim orders cannot be forfeited because the department will be taking an undue advantage of the interim orders through which the conditions were imposed. Therefore the writ petition is allowed and Exts.
P5 and P6 orders are hereby set aside, to the extent it forfeited amounts already paid by the petitioner. Necessary steps shall be taken to revise the orders and to effect W.P.(C) NO. 10298 of 2010 4 refund/ adjustment of the amounts forfeited through Exts. P5 and P6, at the earliest, at any rate within a period of two months from the date of receipt of this judgment.
However, considering the disputed position prevailed, the respondents are exonerated from the liability for payment of any interest due on such refund.