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Judgment
G. Raghuram, J.—Heard Sri S. Suri Babu, learned counsel for the petitioner and Sri P. Balaji Varma, Special Government Pleader for Commercial Taxes for the respondents. In our considered view this litigative exercise by the petitioner would have been avoided had the respondents been more sensitive to their obligations under the provisions of the Act; and since they are not, we are called upon to rule on the petitioner''s claims for payment of interest, i.e., a claim for Rs. 13,73,15,924 for belated refund of Rs. 15,40,07,843, pertaining to the assessment year 1998-99 (APGST) qua section 33F of the Andhra Pradesh General Sales Tax Act, 1957 (for short, "the 1957 Act").
The petitioner is an instrumentality of the State-The Transmission Corporation of Andhra Pradesh. Assessment of the petitioner for 1998-99 was completed by the second respondent vide proceedings dated November 18, 2003 which resulted in refund of Rs. 15,49,39,123. Thereafter, on January 27, 2004 the petitioner submitted a claim for refund of the said amount in form XXIII of the Act and a reminder to the third respondent by a subsequent letter dated April 7, 2004, for expediting the refund.
The third respondent (the Commissioner of Commercial Taxes) by a letter dated April 26, 2004, stated that the first respondent had reported to have adjusted Rs. 15,49,39,123 towards arrears of tax from 1988-89 to 2000-01; that on adjustment, a balance of Rs. 80,86,88,184 remained due. The letter further stated that Rs. 12,35,09,359 and Rs. 29,89,570 for the years 2002-03 and 2003-04 was due under the Tax on Entry of Goods into Local Areas Act, 2001 and these amounts be also remitted by the petitioner.
In response, by the letter dated June 2, 2004, the petitioner informed the third respondent that the arrears of Rs. 80,86,88,184 under the 1957 Act and the Central Sales Tax Act, 1956 were not payable by the petitioner and that collection of entry tax under the 2001 Act was stayed by the STAT. It so transpired that subsequently the appeals were also allowed by the STAT. The petitioner further informed the third respondent that an amount of Rs. 37.96 crores relating to equated rebate in terms of certain Government orders dated November 30, 1967, September 11, 1990 and March 23, 1994 were pending with the Revenue; and by a further letter dated August 27, 2004 expressed its willingness for adjustment of Rs. 2,09,573 relating to tax due for the year 1999-2000 as per the final assessment order pertaining to that year; while reiterating that entry tax was stayed by the Tribunal and the appeals subsequently allowed. The petitioner also addressed reminders by its letters dated January 12, 2005, April 6, 2005, July 12, 2005 and April 25, 2006 requesting early refund of the amount.
In response, the fourth respondent-the State of Andhra Pradesh by the letter dated July 6, 2007 informed the petitioner that refund of excess tax paid for 1998-99 could not be refunded as arrears of penal interest amounting to Rs. 88,89,02,228 for the years 1993-94 to 1997-98 and entry tax of approximately at Rs. 14,36,39,929 for the years 2002-03 and 2003-04 were due from the petitioner. Why the fourth respondent addressed a letter to the petitioner is however not clear.
As no response to the refund claim was forthcoming, the petitioner filed W.P. No. 26627 of 2007 which was allowed by the order of this court dated July 7, 2011 directing refund within four weeks. Only thereafter the first respondent issued proceedings dated November 8, 2011 ordering refund of Rs. 15,40,07,843 and the amount was eventually credited to the petitioner''s account on November 16, 2011. On January 30, 2012, the petitioner addressed the first respondent seeking interest u/s 33F of the 1957 Act, for the period June 12, 2004 to November 15, 2011.
Section 33F of the 1957 Act enjoins that where refund is due to an asses-see in pursuance of an order referred to in section 33B and the assessing or the licensing authority does hot grant refund within a period of six months from the date of such order, the State Government shall pay to the asses-see or the licensee simple interest at 12 percent per annum on the amount due from the date of expiry of the period of six months to the date on which the refund is granted. It is the case of the petitioner that the order of assessment dated November 18, 2003 was made pursuant to an order by the appellate authority and therefore the provisions of section 33F apply. An assertion not disputed by the Revenue.
In view of the provisions of section 33F, the liability to refund the amount of Rs. 15.49 crores consequent on the order of assessment dated November 18, 2003 arises after a period of six months from January 27, 2004, the petitioner submitted a claim for refund in form XXIII, a submission of fact not disputed by the respondents. Six months from January 27, 2004 is July 26, 2004 (not June 12, 2004 as claimed by the petitioner).
The third respondent has filed a counter-affidavit which to the extent relevant and material for the purpose of this lis asserts that assuming the petitioner is entitled to interest, the liability need not be reckoned from the period of six months following from November 8, 2003 under the provisions of section 33F of the 1957 Act till the date of refund. According to the respondents the amount indicated in the refund order dated November 8, 2011 was already adjusted against the then existing arrears of the dealer, i.e., Rs. 88,89,02,228 relating to the year 1998-99 and the fact of the said adjustment was communicated by the third respondent on April 26, 2004. The counter proceeds to state that the refund amount, i.e., Rs. 15,49,39,123 is refundable only pursuant to the appellate order of the STAT in T.A. Nos. 85 and 86 of 2004 dated October 24, 2008 received by the assessing authority on January 23, 2009 (pertaining to the entry tax liability and the interest thereon); and u/s 33F of the 1957 Act consequent interest shall be given to the dealer reckoning the delay only after July 22, 2009, i.e., six months from the date of receipt of the relevant appellate orders of the STAT.
The above contention on behalf of the respondents by the third respondent is stated to be rejected. The liability of the petitioner under the provisions of the Entry Tax Act, 2001 was the subject-matter of the appeals preferred before the STAT and not the liability under the Andhra Pradesh General Sales Tax Act, 1957. 2001 Entry Tax Act was declared unconstitutional by this court in Sree Rayalaseema Alkalies and Allied Chemicals Limited Vs. State of Andhra Pradesh and Others, . On such declaration the Act becomes non est and inoperative from its nativity. Further the Appellate Tribunal (STAT) had also allowed the appeals even according to the counter-affidavit. There is a further fact that requires to be noticed, namely, adjustment of Rs. 88,89,02,228 under the 2001 Entry Tax Act was not affected by the assessing authority nor informed to the petitioner. In any event eventually the respondents granted the refund to the petitioner on November 8, 2011, which they could not have granted if the refund had been absorbed in the adjustment of the liability under the 2001 Entry Tax Act. Section 33F admits no such assertion as is set forth by the respondents in the creative assertions in the counter.
The fact that the respondents have failed to remit the interest component to the petitioner, an instrumentality of the State even after this writ petition is filed sensitizing the respondents of their statutory obligations under the provisions of section 33F signals a sad state of ambivalence and dithering on the part of the respondents in issuing orders of refund along with interest statutorily mandated, a conduct to be deprecated.
On the analysis above, we hold that the petitioner is entitled to interest on the amount of refund due and credited to the petitioner, i.e., Rs. 15,40,07,843 for the period July 26, 2004 to November 15, 2011. We direct the respondents to compute the amount of interest payable qua provisions of section 33F of the 1957 Act within a period of one week from the date of receipt of a copy of this order and remit the same to the credit of the petitioner within a period of three weeks from the date of receipt of a copy of this order. As we find the reluctance of the respondents in granting the interest component, enjoined by the provisions of section 33F of the 1957 Act, we consider it appropriate to impose costs of Rs. 10,000 payable by the respondents jointly and severally to the petitioner which amount shall also be remitted to the petitioner along with interest and within the time directed above. The writ petition is allowed as above with costs.