Sales return tax refund requires proof of actual return and strict compliance with statutory procedure

A claim for refund of tax on alleged sales return was rejected because the assessee failed to prove actual return of the machinery and refund of the sale price and tax. The statutory refund procedure under section 4C of the Tamil Nadu General Sales Tax Act required a timely application to the assessing officer in the prescribed form, and no such compliant claim was shown. The factual findings that the sales were effected and later suppressed in the returns were supported by materials and were not shown to be perverse. The assessment findings were therefore left undisturbed, and no interference was called for on the penalty-related issues on the record.

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Issues: Whether the assessee was entitled to claim refund of tax on the basis that the machinery sold had been returned by the purchaser, and whether the assessment and penalty findings called for interference.

Analysis: The materials did not establish that the sale was cancelled or that the goods were actually returned by the purchaser together with refund of the sale price and tax. The statutory procedure for refund on sales return under section 4C of the Tamil Nadu General Sales Tax Act required a claim to be made before the assessing officer within the prescribed time in the prescribed form, and no such claim was made. The factual findings of the authorities that the sales were effected and later suppressed in the returns were based on materials and were not shown to be perverse. The penalty was also re-determined on a reduced basis by the Tribunal, but no ground was made out for interference with the core assessment findings.

Conclusion: The assessee was not entitled to refund of tax on the alleged sales return, and the assessment findings required no interference. The question of law was answered against the assessee and in favour of the Revenue.

Ratio Decidendi: A claim for refund of tax on sales return must be proved by reliable evidence of actual return and refund, and must be made in strict compliance with the statutory procedure and time-limit; absent such proof and compliance, the assessment will not be disturbed.

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