Inter-State sale finding extended refund relief, as VAT levied without jurisdiction had to be returned.

The petitioners, being similarly situated purchasers of natural gas under the same consortium arrangement earlier examined, were entitled to the benefit of the prior common judgment holding the transactions to be inter-State sales. That ruling had already found that the State of U.P. lacked jurisdiction to levy VAT and that tax collected under the invalid levy had to be refunded. Rejection of refund solely because no separate assessment order had been passed was therefore not justified. The refund rejection orders were quashed and refund of the tax realised was directed.

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Issues: Whether the petitioners were entitled to quashing of the orders rejecting refund and to refund of VAT in view of the earlier decision holding that the gas sale transactions were inter-State sales and that the State lacked jurisdiction to levy VAT.

Analysis: The petitioners purchased natural gas from the same consortium arrangement that was already examined earlier. The prior common judgment had conclusively held that the transaction was not an intra-State sale but an inter-State sale, that the State of U.P. lacked jurisdiction to impose VAT, and that the tax realised under the invalid levy was to be refunded. Since the petitioners were similarly situated purchasers covered by the same transaction structure, the rejection of refund only on the ground that no separate assessment order had been passed was not accepted. The earlier determination operated to extend the benefit of the decision to the petitioners as well.

Conclusion: The refund rejection orders were quashed and the petitioners were held entitled to refund of the tax realised.

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