2019 (9) TMI 527 - HC - VAT and Sales Tax

Petition for VAT refund denied as High Court upholds Supreme Court ruling on no refund entitlement.

The High Court dismissed the writ petition, ruling that the petitioner was not entitled to a refund of the excess VAT paid during appellate proceedings. ... Refund of extra amount deposited during the pendency of appellate proceedings - petitioner claims that entire burden has been born but it only - whether the petitioner is entitled for refund of excess amount paid for the subject assessment years in terms of the judgment in Ext.P3 and/or whether Ext.P4 order gives finality to conclusions recorded in Ext.P3 judgment? HELD THAT:- when the Hon’ble Supreme Court while passing orders in Ext.P4 stated that applications for modification/ clarification stand rejected, anit means that firstly there is no necessity for clarification and secondly the modification of Ext.P3 judgment by issuing necessary directions is not warranted. The word ‘rejected’ is understood to mean to refuse to believe, anaccept, anor consider (something). Upon due consideration of the undisputed circumstances the prayer for refund of difference of amount cannot be directed by this Court. This Court is required to bear in mind that by applying the general principles of refund the case of petitioner could not be examined. This Court in exercise of its jurisdiction under Article 226 of the Constitution ought not to revisit the very same circumstances and grant the prayers as made - Petition dismissed. Issues Involved:1. Eligibility for refund of excess VAT paid during appellate proceedings.2. Interpretation of the Supreme Court judgment in Civil Appeal No. 1440 of 2010.3. Application of the principle of unjust enrichment.4. Jurisdiction of the High Court to order a refund contrary to the Supreme Court's decision.Detailed Analysis:1. Eligibility for Refund of Excess VAT Paid During Appellate Proceedings:The petitioner sought a writ of certiorari to quash Ext.P1 and claimed eligibility for a refund of the excess VAT deposited during the pendency of appellate proceedings for the assessment years 2005-06 to 2014-15. The petitioner argued that para 40 of the Supreme Court judgment dated 18.03.2015 (Ext.P3) only referred to VAT paid and not the excess amount paid during the period in question.2. Interpretation of the Supreme Court Judgment in Civil Appeal No. 1440 of 2010:The Supreme Court, in its judgment (Ext.P3), determined that the products 'Ujala Supreme' and 'Ujala Stiff and Shine' were taxable at 4%/5% under the HSN Code and not at 12.5% under the residuary entry. The Court held that the products fell under Entry Nos. 155(8)(d) and 118(5) of the Third Schedule of the 2003 Act, and not under the residuary Entry 103 of SRO 82/2006. However, the Supreme Court explicitly stated in para 40 that 'if any assessee-appellant has paid the amount of VAT to the State Government, they will not be entitled to get any refund of the said amount.'3. Application of the Principle of Unjust Enrichment:The petitioner contended that the excess amount paid was not passed on to the customers and was borne by the petitioner, therefore, it should be refunded. The petitioner cited various judgments to support the claim that amounts paid in excess without passing the burden to customers do not attract the principle of unjust enrichment and hence should be refunded. However, the respondents argued that the Supreme Court's judgment in Ext.P3 and the subsequent order in Ext.P4, which rejected the modification/clarification applications, conclusively settled that no refund was due.4. Jurisdiction of the High Court to Order a Refund Contrary to the Supreme Court's Decision:The respondents contended that the High Court should not interpret the Supreme Court's judgment as it would amount to expanding the scope of Ext.P3. The Supreme Court's order in Ext.P4, which rejected the applications for modification/clarification, reinforced that no refund was to be granted. The High Court noted that the Supreme Court's judgment and order were binding and that revisiting the issue would be beyond its jurisdiction.Conclusion:The High Court dismissed the writ petition, holding that the petitioner was not entitled to a refund of the excess VAT paid. The Court emphasized that the Supreme Court's judgment in Ext.P3 and the subsequent order in Ext.P4 were conclusive and binding, precluding any refund of the excess amount paid. The High Court declined to reinterpret the Supreme Court's decision or to grant any relief that would contradict the clear stipulations of the Apex Court's judgment. The writ petition was dismissed with no order as to costs.