Refunded tax after retrospective liability shift cannot be fastened again on the dealer; unnecessary remand set aside.

Where tax collected by a dealer was later refunded to the purchaser after a retrospective shift of liability, the dealer could not be compelled to deposit the same amount again with the Department, because Section 43 of the U.P. VAT Act applied only to sums realised in contravention of sections 22 and 23. The refund had already been verified by the assessing authority and confirmed in the departmental report, so a further remand solely to recheck that refund served no useful purpose and was rightly set aside.

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Issues: (i) Whether the amount of tax realised by the dealer and subsequently refunded to the purchaser in view of the retrospective notification could still be fastened on the dealer. (ii) Whether the remand ordered by the Tribunal for verification of the refund was justified.

Issue (i): Whether the amount of tax realised by the dealer and subsequently refunded to the purchaser in view of the retrospective notification could still be fastened on the dealer.

Analysis: Section 43 of the U. P. VAT Act governs deposit of amounts realised in contravention of sections 22 and 23. The amount in question was not realised in breach of those provisions, but was initially collected in the ordinary course and later refunded when the liability shifted to the purchasing dealer under the retrospective notification. Once the refund was in fact made to the purchaser who had taken over the tax burden, there was no legal basis to insist that the dealer must nevertheless deposit the amount with the Department.

Conclusion: The tax amount could not be fastened upon the dealer and the refund to the purchaser was valid.

Issue (ii): Whether the remand ordered by the Tribunal for verification of the refund was justified.

Analysis: The refund had already been verified by the assessing authority and the departmental report confirmed that the amount had been refunded to the purchaser. In these circumstances, no further purpose would be served by sending the matter back only for the same verification exercise.

Conclusion: The remand was not justified and was liable to be set aside to that extent.

Final Conclusion: The revision succeeded to the extent that the dealer was relieved from the tax demand linked to the refunded amount and the unnecessary remand was deleted, while the matter stood otherwise concluded.

Ratio Decidendi: Where tax collected by a dealer is in fact refunded to the purchaser after a retrospective shift of liability, the dealer cannot be compelled to deposit that refunded amount again with the Department, and a remand for verification becomes unnecessary once the refund is already duly established.

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