TaxTMI 
TaxTMI 
2003 (7) TMI 659
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....y. The applicant had to deposit following amounts in respect of following assessment years which became due on account of remand order passed by the Assistant Commissioner (Judicial), Sales Tax: 1968-69 ... Rs. 74,833 1969-70 ... Rs. 95,506 1970-71 ... Rs. 1,35,666 1971-72 ... Rs. 2,38,435 The applicant adjusted the above amount due to it in the payment of tax for the months of April, May and August, 1977. In the final assessment proceeding the assessing authority for the relevant assessment year 1977-78 vide order dated February 27, 1982 refused to grant adjustment of the said amount in the admitted tax liability for the months of April, May and August, 1977 on the ground that there is no such provision for adjustment under the Act and the dealer cannot itself adjust the outstanding dues payable to him by the department. Consequently he imposed interest for late payment to the said admitted tax liability which was sought to be adjusted by the dealer amounting to Rs. 48,845.18. The said order was confirmed by the first appellate authority as well as by the Tribunal vide order under revision. 4.. Undaunted by the failure the dealer has raised the above questi....
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....facts or circumstances of the case to refund the tax of the amount paid: Commissioner of Sales Tax v. Auraiya Chamber of Commerce [1986] 62 STC 327 (SC); (1986) 25 ELT 867 (SC); 1986 UPTC 917 (SC). [See also Sales Tax Officer v. Kanhaiya Lal [1958] 9 STC 747; AIR 1959 SC 135, State of Madhya Pradesh v. Bhailal Bhai [1964] 15 STC 450 (SC); AIR 1964 SC 1006, State of Kerala v. Aluminum Industries Ltd. [1965] 16 STC 689 (SC).]" It has further been held that refund of tax or duty is founded on principle of absence of leviability. That is what was paid was not tax or duty but money either because it was not taxable or at the point of time it was paid it was exempt under any provision of law. This Court has gone to the extent in the aforesaid case that the claim for refund of duty, tax collected illegally is liable to be refunded, notwithstanding the claim having become barred by time under the statute. Necessary direction could be issued under article 226 for refund of the amount paid under mistake of law. 8.. In the above background now let us have a look at the statutory provision, if any, under the U.P. Sales Tax Act. Reliance was placed upon section 29 of the U.P. Sales Tax....
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....ty. The contention of the assessee that a sum of Rs. 620 was refundable to the assessee from the department and, as such shortage of three paise can very well be adjusted against the refund due to the assessee and, as such, appeal cannot be said to be incompetent. Interpreting section 29 of the Act the aforesaid plea was accepted in that case with the following observation: "When a tax liability is to be discharged by an assessee, he can ask the Sales Tax Officer to adjust against such liability any amount which may be refundable to him. Under this proviso, there is a provision for an automatic adjustment so that in a case like the present one, there shall be deemed to have taken place an automatic adjustment of the amount refundable to the assessee against his liability of admitted tax." To my mind the aforesaid judgment squarely applies to the facts of the case in hand. 9.. A learned single Judge in Greenfield v. Commissioner of Sales Tax 1981 UPTC 1183, has further interpreted the aforesaid judgment and it was held that there is no reason why principle of adjustment is not applicable to the tax due or admitted liability. Relevant paras 3 and 5 are quoted below: "3.......
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....tution is well-recognised principle of law and finds place in section 144 of the Code of Civil Procedure, 1908. The said section provides that where any decree or an order is varied or reversed in any appeal, revision or other proceeding is set aside or modified in any suit instituted for the purposes, the court which passed the decree or order shall restore to the party any benefit by way of restitution or otherwise and place the parties in a position which they would have occupied, but for such an order or decree. It is a principle of law that acts of courts should not be allowed to work injury on the suitors. One of the first duty of the court is to take care that the act of the court does no injury to the suitors. The doctrine of restitution contemplates a case where the property has been received back by the decree holder under his decree and the decree is subsequently whole or partially reversed or varied in other proceedings. 10.. On a plain reading of section 29 of the Act, the view taken by the Tribunal cannot be sustained. A division Bench of this Court in the case of Pankaj Gas Cylinders Limited v. State of U.P. [2004] 136 STC 482; 2003 UPTC 499 has observed that the ....
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....none of those things" as it may be presumed "that the Legislature should have used the word in that interpretation which least offends our sense of justice".' (p. 113, ibid.) 'The Court strongly lean against a construction which reduces the statute to a futility. A statute or any enacting provision therein must be so construed as to make it effective and operative "on the principle expressed in the maxim: ut res magis valeat quam pereat".' (p. 36 ibid.). 'If the language used is capable of bearing more than one construction, in selecting the true meaning regard must be had to the consequences resulting from adopting the alternative constructions. A construction that results in hardship, serious inconvenience, injustice, absurdity or anomaly or which leads to inconsistency or uncertainty and friction in the system which the statute purports to regulate has to be rejected and preference should be given to that construction which avoids such results'." 13.. To clarify further I may add that the party is entitled to refund of only those amount, which were paid or deposited during the pendency of appeal, not referable to any admitted tax liability. Recently under the Income-tax Ac....