Refund of excess trade tax limited to amount not passed on to customers under U.P. Trade Tax law

Under section 29-A of the U.P. Trade Tax Act, 1948, refund of excess tax realised from customers is available only to the customers who bore that burden, and only if claimed within the prescribed time and manner. For assessment year 1979-80, the dealer could not obtain refund because the entire excess had been passed on to customers and no timely claim was made by them. For assessment years 1980-81 and 1981-82, refund was confined to the portion of tax actually borne by the dealer, namely the amount deposited in excess of what was realised from customers.

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Issues: (i) Whether the assessee was entitled to refund of the excess tax deposited for assessment year 1979-80 when the entire excess had been realised from customers; and (ii) whether, for assessment years 1980-81 and 1981-82, the assessee was entitled to refund of the amount deposited in excess of the amount actually realised from customers.

Issue (i): Whether the assessee was entitled to refund of the excess tax deposited for assessment year 1979-80 when the entire excess had been realised from customers.

Analysis: Section 29-A of the U.P. Trade Tax Act, 1948 permits refund of excess tax only to the person from whom the amount was actually realised, and the claim has to be made within the prescribed time and in the prescribed manner. In the present case, the entire amount deposited for assessment year 1979-80 had been realised from customers, and no claim had been made by those customers within the statutory period.

Conclusion: The assessee was not entitled to refund for assessment year 1979-80.

Issue (ii): Whether, for assessment years 1980-81 and 1981-82, the assessee was entitled to refund of the amount deposited in excess of the amount actually realised from customers.

Analysis: The factual record showed that for these two years the tax deposited exceeded the tax actually realised from customers to the extent of the difference between the deposited amount and the realised amount. Section 29-A does not bar refund of the amount actually borne by the dealer, while the amount realised from customers remains refundable only to those customers in accordance with the statute.

Conclusion: The assessee was entitled to refund only of the amount deposited in excess of the amount actually realised from customers for assessment years 1980-81 and 1981-82.

Final Conclusion: The revision succeeded in part: refund was denied for assessment year 1979-80, while refund was confined for assessment years 1980-81 and 1981-82 to the excess not realised from customers.

Ratio Decidendi: Under section 29-A of the U.P. Trade Tax Act, 1948, excess tax realised from customers is refundable only to the customers and within the prescribed limitation and procedure, whereas the dealer may obtain refund only of the part of the tax that was not passed on.

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