Richardson Cruddas (1972) Limited, Chennai vs Commercial Tax Officer, Visakhapatnam

S.R Nayak, J.—Heard the learned Counsel for the petitioner and the learned Special Government Pleader for Taxes and with their consent the writ petition was heard finally.

The petitioner is a Government of India Undertaking, registered under the Companies Act. The petitioner is engaged in the business of execution "of contracts of erecting steel structurals. During the years 1986-87 and 1987-88, the petitioner was assessed to sales tax under the Andhra Pradesh General Sales Tax Act, 1957 (hereinafter referred to as the Act) on the contracts executed by it in favour of Visakhapatnam Steel Plant. The disputed levy was set aside by the Appellate Deputy Commissioner and remanded. However, the Appellate Deputy Commissioner rejected the principal contention of the petitioner that the items used in works contract constitute second sates. On appeals filed, the Sales Tax Appellate Tribunal, in TA Nos.160 and 162 of 1993 for the years 1986-87 and 1987-88 respectively, upheld the petitioner''s contention that the goods involved are subject-matter of second sales and directed the assessing authority to finalise assessment accordingly. Another T.A. No.157 of 1993 for the assessment year 1985-86 was also allowed by the Tribunal. Pursuant to the order of the Tribunal, the respondent finalised assessment by his orders dated 7-7-1997. The respondent failed to give credit of certain payments made by the petitioner resulting in a demand of Rs.23,053/- and Rs.1,42,550/-for 1986-87 and 1987-88 respectively. On representations, the respondent has passed orders dated 7-1-2000 (vide Annexure P1 at Page 9 of the material papers) giving due credit of taxes paid by the petitioner and determined the refund due to petitioner in a sum of Rs.3,56,952/- and Rs.1,49,554/-.

As stipulated in Form ''C'' for each assessment year, the petitioner filed application in Form-XXIII by registered post acknowledgment due in February, 2000 claiming the refund (vide Annexure P2 at page 13). According to the petitioner, the respondent has forwarded the proposal to the Deputy Commissioner (CT), Visakhapatnam for approval on administrative side and such a course is not contemplated under the Act or Rules.

The petitioner so alleging has filed this writ petition for a writ of mandamus directing the respondent Commercial Tax Officer to refund the amount of Rs.3,56,952/-and Rs.1,49,554/- for the assessment years 1986-87 and 1987-88 respectively due as per the orders of the Commercial Tax Officer dated 7-7-1997 passed pursuant to the orders of the Sales Tax Appellate Tribunal in TA. Nos.160 and 162 of 1993, dated 1-7-1994. The fact is that in pursuance of the above order of the STAT the respondent herein has passed the order in GI No.86-87, dated 7-7-1997. There after wards, formal orders dated 7-1-2000 bearing GI No.5611/86-87 were issued by the respondent certifying that the excess tax of Rs.3,56,952/- and Rs.1,49,554/- were collected from the petitioner-dealer for the assessment years 1986-87 and 1987-88. Although, the respondent filed counter affidavit opposing the relief, we should state that the learned Special Government Pleader for Taxes quite fairly did not press the untenable defence taken in the affidavit.

Section 33-B of APGST Act reads:

"Where as a result of any order passed in appeal or other proceeding under this Act, refund of any amount becomes due to the assessee or licensee, the assessing or licensing authority shall refund the amount to the assessee or licensee without his having to make any claim in that behalf, or adjust or apply, such amount as provided in Section 33."

Sub-section (1) of Section 33-F of the APGST Act, reads:

"Where a refund is due to the assessee or licensee in pursuance of an order referred to in Section 33-B 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."

A combined reading of the provisions of Section 33-B and sub-section (I) of Section 33-F of the Act, makes it abundantly clear that the petitioner entitled to interest. Since the Commercial Tax Officer in pursuance of the order of the STAT passed the order on 7-7-1997 and since the determined excess tax was not refunded to the petitioner-dealer within the period of six months as contemplated u/s 33-F of the Act, it becomes imperative for the respondent to pay the interest at the rate of 12% per annum on the amount of refund due from the date immediately following the expiry of six months. In other words, the respondent is liable to pay the interest at the rate of 12% per annum with effect from 12-1-1988, the date on which the period of six months contemplated u/s 33-F of the Act expired. It is stated that the respondent till date has not refunded the excess tax. The plea taken by the respondent in the counter is that he did not refund the excess tax to the petitioner because he had to seek ''no objection'' from the concerned Deputy Commissioner, Commercial Taxes and the concerned Deputy Commissioner, Commercial Taxes has not granted such approval because the petitioner has failed to produce some books of accounts demanded by the Deputy Commissioner. This is totally an untenable plea and excuse not to refund the tax in time.

At the time of hearing, learned Special Government Pleader for Taxes was not in a position to draw our attention to any of the provisions of the Act or rules framed there under which such a duty is cast on the Commercial Tax Officer to seek approval from the concerned Deputy Commissioner to refund the tax. If there is no such legal obligation, simply because the Commercial Tax Officer thought it fit to seek approval from the Deputy Commissioner and the Deputy Commissioner has not yet accorded such permission, that circumstance itself cannot be a valid ground that can be put forth against the petitioner who is entitled to seek refund in terms of the order made by the respondent himself on 7-7-1997 read with Section 33-F of the APGST Act.

In the result and for the foregoing reasons, we allow this writ petition. A direction shall issue to the respondent to refund the excess tax collected from the petitioner for the assessment years 1986-87 and 1987-88 within a period of one month from the date of receipt of a copy of this order with interest calculated at the rate of 12% per annum on the amount of refund with effect from 7-1-1988 till the payment is made. The petitioner is entitled to costs of this writ petition quantified at Rs.3,000/- payable within two weeks. The cost may be paid to the learned Counsel for the petitioner. However, it is open to the State to recover the cost from the salary of respondent.