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Judgment
B.V. Nagarathna, J.—The petitioner who is stated to be engaged in the business of manufacture of designer wax candles as a 100 per cent export oriented unit has assailed the endorsement dated November 6, 2013 issued by the first respondent. Briefly stated, it is the case of the petitioner that during the course of business for the assessment period 2012-13, the petitioner has effected exports to an extent of nearly 95 per cent of the goods manufactured by it and that it was not liable to pay any value added tax under the provisions of the Karnataka Value Added Tax Act, 2003 ("the Act", for short). That u/s 10 of that Act, provision is made for output tax, input tax and net tax payable by the registered dealer. Rules 127 and 128 of the Karnataka Value Added Tax Rules, 2005 ("the Rules", for short) made under that Act provide for adjustment and refunds respectively with regard to the excess tax paid. It is the case of the petitioner that for the period 2012-13 excess tax to an extent of Rs. 1,29,11,119 was paid and the same had been quantified by the respondent-Department. Therefore, a claim was made for refund of excess tax paid by the petitioner. In response to the claim, annexure-J endorsement dated November 6, 2013 which is impugned in this writ petition has been issued. Being aggrieved by the endorsement, writ petition has been filed.
I have heard the learned counsel for the petitioner and learned Additional Government Advocate for the respondents and perused the material on record.
In the instant case, petitioner being a 100 per cent export oriented unit would not be liable for payment of tax under the Act in so far as goods exported by it. The tax is liable to be paid in so far as local sales are concerned. It is contended on behalf of the petitioner that the eligibility of the petitioner for refund of the excess input tax paid by it as well as the quantum have been admitted by the respondent, the reason given for the impugned endorsement that the amount cannot be refunded at this stage is contrary to what is stated in rule 128 of the Rules.
The learned Additional Government Advocate supporting the endorsement with reference to the statement of objections has stated that unless and until the petitioner gives all the details with regard to the claim for refund of the excess input tax, the same cannot be refunded.
On perusal of the endorsement dated November 6, 2013, it is noted that the reason for refusing to refund the excess input tax is that the assessment for the year 2012-13 would have to be audited. It is only after the audit of the said accounts that the excess tax paid could be refunded. The reason given for the refusal of refund of the excess tax paid by the assessee in my view, is not in consonance with the Rules. The quantum of tax to be refunded is also an admitted fact as well as the eligibility of the petitioner to receive refund.
In that view of the matter, the impugned endorsement is contrary to rule 126 of the Rules and therefore, it is quashed.
At this stage, learned Additional Government Advocate states that within a period of three weeks from the date of receipt of certified copy of this order, the excess input tax paid by the petitioner would be refunded. Counsel for the petitioner states that the representation would be made to the concerned authority along with the copy of this order for seeking actual refund of the amount.
Liberty is also reserved to the petitioner to claim interest on the delayed refund of the excess input tax. Writ petitions are disposed of in the aforesaid terms.