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Judgment
Goda Raghuram, J.—For the assessment year 1997-98, the Commercial Tax Officer concerned completed the assessment and passed an assessment order dated August 16, 1999. The petitioner is doing business in supply of pre-stressed concrete sleepers to the South Central Railways. The enforcement wing of the Department inspected the petitioner''s premises and detected that it failed to disclose certain sales effected to South Central Railway. On the basis of the report, the Deputy Commissioner proposed to revise the assessment exercising powers u/s 9(a) of the Central Sales Tax Act, 1956 (for short, "the 1956 Act") read with section 14(8) and 29(2) of the A. P. General Sales Tax Act, 1957 (for short, "the 1957 Act"). After a due process including personal hearing, by the order dated August 20, 2003, the Deputy Commissioner revised the assessment u/s 14(4)(c) of the 1957 Act. The revised assessment order was served on the petitioner on September 12, 2003. This order also indicates that separate penal action was being initiated against the petitioner for suppressing the turnover u/s 9(a) of the 1956 Act read with section 14(8) of the 1957 Act. Eventually the Deputy Commissioner passed a penalty order on September 5, 2003 imposing a penalty of five times the tax due, i.e., Rs. 3,22,25,365. Against the order dated September 5, 2003, the petitioner preferred an appeal to the Sales Tax Appellate Tribunal in T. A. No. 353 of 2004. Before the Tribunal the petitioner sought stay of the order of penalty which was however declined. Thereupon the petitioner preferred a revision, which was disposed of directing stay of collection of the disputed penalty amount (which was subject of an appeal before the STAT), on condition that the petitioner deposits 25 per cent of the penalty determined, i.e., 25 per cent of Rs. 3,22,25,365. The petitioner has deposited this penalty amount. Eventually, by the order dated October 23, 2009, the Tribunal allowed the petitioner''s appeal and set aside the revisional order dated September 5, 2003 passed by the Deputy Commissioner levying penalty.
As a consequence of the order dated October 23, 2009 of the STAT and in view of the fact that no revision or other remedy there against was pursued by the Revenue, the petitioner was entitled to refund of 25 per cent of the penalty amount deposited pursuant to the order of this court and pending the appeal before the STAT.
Section 33F of the 1957 Act reads as under:
33F. Interest on refund where no claim need be made.-(1) Where a refund is due to the assessee or licensee in pursuance of an order referred to in section 33B and the assessing or the licensing authority does not grant the refund within a period of (six months) from the date of such order, the State Government shall pay to the assessee or the licensee simple interest at (twelve per cent) per annum on the amount of refund due from the date immediately following the expiry of the period of six months aforesaid to the date on which the refund is granted.
(2) Where the refund is withheld under the provisions of section 33C, the State Government shall pay interest at the aforesaid rate on the amount of the refund ultimately determined to be due as a result of the appeal or further proceeding for the period commencing after the expiry of (six months) from the date of the order referred to in section 33C to the date the refund is granted.
In terms of the provisions of section 33F, the Revenue was liable to refund the amount deposited by the petitioner (pending the appeal before the STAT) plus interest thereon with effect from April 23, 2010 (in the writ petition however the interest is claimed from April 25, 2010). Qua the provisions of section 33F of the 1957 Act the liability to payment of interest is not dependant upon a claim being made by the petitioner in this behalf. Be that as it may.
The counter-affidavit admits that after the Tribunal allowed its appeal on October 23, 2009, the petitioner submitted a representation on June 14, 2010 requesting the Deputy Commissioner to refund the amount deposited by it towards penalty. However no action having ensued for refunding the amount by the Revenue, the petitioner filed the writ petition for refund of the amount together with interest with effect from April 25, 2010, as enjoined under the provisions of section 33F of the 1957 Act.
The writ petition was filed on October 19, 2011 and when it was presented before the Bench on October 24, 2011, the learned Special Government Pleader sought time to obtain instructions stating that necessary steps are being taken to refund the amount. Three weeks time was granted on October 24, 2011. Thereafter, on November 24, 2011 further time was sought by the learned Special Government Pleader and again on December 27, 2011. On December 27, 2011 the learned Special Government Pleader was directed to obtain instructions from the Commissioner of Commercial Taxes regarding refund of the amount claimed by the petitioner since the Revenue was procrastinating on the issue of refund and for no justifiable reasons.
It is a conjoint submission on behalf of the learned counsel for the petitioner and the learned Special Government Pleader for Commercial Taxes that eventually only the principal amount (of the penalty deposited) was paid to the petitioner on February 28, 2012. The interest as statutorily due u/s 33F of the 1957 Act was however not paid and for no reasons vouchsafed.
The learned counsel for the petitioner legitimately complains that even after February 28, 2012, no steps were taken to pay the interest. After three more adjournments since February 27, 2012, the 1st respondent filed a counter-affidavit dated March 12, 2012. In para 4 of the counter, the only reason vouchsafed for not refunding the amount is that the answering respondent took charge of the office on June 1, 2011 and the claim of the petitioner was not brought to his notice either by the petitioner or by his own staff. With regard to the claim of the petitioner for interest due to be paid u/s 33F, the counter states that after the writ petition was filed, the respondent verified the records and found that the petitioner had availed of sales tax deferment for the period 1998-99 to 2002-03 in a sum of Rs. 58,03,125; had stopped production from March, 2004 onwards; and in view of the conditions in the final eligibility certificate, the petitioner has to carry on its business till 2024. As the petitioner violated the conditions of that certification, it is liable to pay the entire amount availed of as sales tax deferment. Notices dated May 24, 2004 and December 21, 2005 were issued requesting the petitioner to pay the amount availed of towards sales tax deferment. The petitioner paid the amount (of the sales tax deferment benefit) in March, 2009. It is the further contention of the answering respondent that after the writ petition was filed, he processed the claim of the petitioner and paid the principal amount without noticing that the petitioner failed to pay interest on the belated payment of the amount availed of towards sales tax deferment. It is only after refunding the principal amount on February 28, 2012, the answering respondent states to have realized this error and the liability of the petitioner to pay interest and issued a notice dated March 2, 2012 calling upon the petitioner to pay interest on the belated payment. It is the equivocal assertion of the respondent that the petitioner was liable to pay interest on belated payment of the sales tax deferment availed of by it and was thus due amounts to the Revenue. On this account, the Revenue is justified in withholding the payment of interest, is the case of the Revenue.
Section 33C of the 1957 Act reads :
33C Power to withhold refund in certain cases.-Where an order giving rise to a refund to an assessee or licensee is the subject-matter of an appeal or further proceeding or where any other proceeding under this Act is pending, and the assessing or the licensing authority is of the opinion that the grant of the refund is likely to adversely affect the Revenue, the assessing or the licensing authority may, with the previous approval of the Deputy Commissioner, withhold the refund till such time as the Deputy Commissioner may determine.
It is neither stated in the counter-affidavit nor asserted by the learned Special Government Pleader for Commercial Taxes at the hearing today that any order was passed by the assessing authority with the previous approval of the concerned Deputy Commissioner for withholding either the amount of refund due to the petitioner (consequent on T.A. No. 353 of 2004 having been allowed by the Tribunal on October 23, 2009) or that any such order was passed in exercise of the power u/s 33C even for withholding the interest component due u/s 33F of the 1957 Act.
In Mukunda Dairy Products Pvt. Ltd. Vs. Commercial Tax Officer and Another, a learned Division Bench of this court considered a somewhat apposite raft of circumstances. The petitioner therein, a company was assessed to tax under the 1957 Act and tax was levied on the disputed turnover, for the assessment year 2003-04. The petitioner preferred an appeal there against u/s 19 of the Act challenging the order of assessment dated August 20, 2004 and at the time of filing the appeal, as required under the statute deposited 12.5 per cent of the disputed tax for maintaining the appeal. The appeal was allowed and the order of the assessing authority was set aside. The petitioner was thus entitled to refund of the pre-deposit made while preferring the appeal. Despite repeated representations, there was no order of refund forthcoming. He then filed the writ petition. This court on June 17, 2005 directed the Revenue to file a counter and thereafter (as in this case) several adjournments were obtained by the Revenue for filing its response. In a counter-affidavit eventually filed, the Deputy Commercial Tax Officer took the plea that the Additional Commissioner had issued a show-cause notice on July 16, 2005, proposing to set aside the appellate order and therefore refund of the pre-deposit amount could be withheld. This court allowed the writ petition and directed refund of the amount and also directed the refund to be made with interest at the rate of 18 per cent per annum.
In the case on hand, we find the conduct of the respondent in particular the first respondent to be arbitrary. Despite the petitioner being entitled to refund (of the amount deposited towards penalty pending the appeal before the STAT, consequent on the order of the STAT dated October 23, 2009 allowing T. A. No. 353 of 2004) no steps were taken despite repeated representations of the petitioner till the writ petition was filed. There is no scintilla of explanation by the respondent for the inaction in processing the petitioner''s claim for refund since October 23, 2009 except a jejune plea that the first respondent (the answering respondent) had assumed office as Commercial Tax Officer on June 1, 2011. It is not as if the Commercial Tax Officer, Maharajgunj come into being with the answering respondent''s incumbency. Public offices are a continuum. Be that as it may.
The principal amount of the tax deferment benefit availed of by the petitioner was deposited by the petitioner in March, 2009, even prior to the STAT allowing the petitioner''s appeal. No steps were taken thereafter by the Revenue to recover the amount of interest allegedly due from the petitioner on the belated payment of the sales tax deferment liability. Such discovery was not made even when the principal amount was refunded to the petitioner on February 28, 2012 and after the filing of the writ petition. It is only when the petitioner was pleading for payment of the interest enjoined by section 33F of the 1957 Act that the Revenue appear to have discovered that the petitioner was liable to pay interest in respect of another transaction. The series of events adverted to above leave us no doubt that the conduct of the respondent was unfair and arbitrary. Even till date no order has been passed u/s 33C of the 1957 Act for withholding of the amount due to the petitioner.
In the facts and circumstances of the case, we are inclined to allow the writ petition and direct the respondents to compute and pay the petitioner the interest due and liable consequent on the order of the STAT dated October 23, 2009 in T. A. No. 353 of 2004, in accordance with the mandate of section 33F of the 1957 Act, within a period of two weeks from the date of receipt of a copy of this order. Since we have concluded that withholding payment of interest to be arbitrary, we are inclined to allow the writ petition with costs of Rs. 1,000 (rupees one thousand) payable to the petitioner by the State. The writ petition is allowed as above with costs.