The Commercial Taxes Officer vs Shree Containers Pvt. Ltd.

Alok Sharma, J.—This revision petition challenges the order dated 23-3-1998 passed by the Rajasthan Tax Board, Ajmer (hereinafter ''the Board'').

The facts of the case are that the assessee is engaged in the business of manufacturing and selling of tin containers and mustard oil etc. The assessing officer vide order dated 5-9-1995 directed that an amount of Rs. 2,24,936/- resulting from the respondent assessee''s (hereinafter ''the assessee'') right of set off of tax under the obtaining provisions be refunded to the assessee. Aggrieved of the assessing officer in his order dated 5-9-1995 not allowing interest at the rate of 15% on the amount to which the assessee was held entitled, the assessee filed an appeal before the Board. Vide order dated 23-3-1998 the Board held the assessee entitled to interest at the rate of 15% from the date amount become due till the date of payment. Hence this revision petition.

Heard the officer in-charge and perused the impugned order dated 23-3-1998 passed by the Tax Board. Considered.

The OIC submits that the decision of the Board to pay the assessee interest at the rate of 15% on the amount of refund was not within the scope of Section 23(2) of the Rajasthan Sales Tax Act, 1954 (hereinafter ''1954 Act''). He submits that in the case at hand no excess deposit of tax was made by the assessee, but he was held entitled to a refund by the assessing officer only on account of the benefit of set off.

To appreciate the contention it would be beneficial to reproduce Section 23 of the 1954 Act, which reads as under:-

Refunds. (1) The assessing authority shall, in the prescribed manner refund to a dealer any amount of tax paid by such dealer in excess of the amount due from him under this Act, either by cash payment or by deduction of such excess from the amount of tax due in respect of any other period.

(2) An amount refundable to a dealer under this Act shall carry interest at the rate of 15 per cent per annum with effect from the date of deposit of the amount to be refunded.

Section 23(2) of the Act of 1954 entitles an assessee to refund of excess tax paid to the department along with interest @ 15% from the date of excess amounts obtain with the department till date of payment. It is obvious that the section in issue incorporates a principle of equity. Money only has time value i.e. the value is diluted with time. Interest compensates for dilution of money value. If the contention of the OIC were to be upheld, the assessee''s entitlement to refund for reasons of set off would be made to bleed with passage of time and he be left with no recourse. Such an interpretation would also confer arbitrary powers in the hands of the department to hold back without limit money due to an assessee as refund. In the circumstances, I am not inclined to narrowly read Section 23(2) to exclude payment of interest at the rate prescribed thereunder on excess tax in deposit with the department arrived at by the assessing office for reason of the assessee''s right to set off and which amount was admittedly found refundable to the assessee.

I, therefore, do not find any force in the submission of the officer-in-charge in challenging the order dated 23-3-1998 passed by the Tax Board. There is no illegality or perversity in the impugned order passed by the tax Board.

There is no force in the revision petition. Dismissed.