TaxTMI 
TaxTMI 
TaxTMI 
2014 (6) TMI 623
X X X X Extracts X X X X
X X X X Extracts X X X X
....o verify the T.D.S. certificate and, if the same was found to be correct, the amount deducted was directed to be paid to the petitioner. According to the petitioner, certain amount was refunded in certain assessment years either in full or in part but balance amount, as per the T.D.S. Certificates, remained unpaid for one reason or the other. The petitioner, accordingly, made various applications to the Assessing Officer praying for the refund of the T.D.S. amount. Separate orders were passed by the Assessing Officer on the applications of the petitioner directing the office to refund the amount after due verification. In spite of these orders, the office of the Assessing Officer failed to refund the amount. Accordingly, an application dated 13.09.2005 was filed praying for refund of the T.D.S. amount along with interest. According to the petitioner, between the period 1987-88 to 1998-99, a total amount of Rs. 4,62,368.00 was deducted as tax at source, out of which an amount of Rs. 1,92,969.74 was refunded and the balance amount of Rs. 2,88,081.00 remained unpaid. The petitioner, accordingly, prayed that the said amount along with interest should be refunded. It transpires that t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....that since the goods supplied by the petitioner was not liable for tax, there was no reason for the alleged deduction of tax at source and, consequently, the burden was upon the petitioner to show that no tax was realised from the contractee. Since the burden had not been discharged, the principle evolved in the case of Mafat Lal Industries (Supra) with regard to unjust enrichment would squarely apply. In the light of the aforesaid, the Court has heard Sri Praveen Kumar, the learned counsel for the petitioner and Sri C.B.Tripathi, the learned counsel for the respondents. The principle of unjust enrichment as evolved by Supreme Court in the case of Mafat Lal Industries's (Supra) is a just and salutary doctrine, namely, that no person can seek to collect the tax or duty from both ends. In other words, no person can collect the duty from the purchaser at one end and collect the same from the State on the ground that it had been collected from him contrary to law. In that light, the doctrine of unjust enrichment was evolved contending that the power of the Court was not meant for unjustly enriching a person. In this regard the Supreme Court held that in a case where any claim for....
X X X X Extracts X X X X
X X X X Extracts X X X X
....son who has ultimately borne the burden and it is only that person who can legitimately claim its refund. But where such person does not come forward or where it is not possible to refund the amount to him for one or the other reason, it is just and appropriate that that amount is retained by the State i.e. by the people. There is no immorality or impropriety involved in such a proposition. The doctrine of unjust enrichment is a just and salutary doctrine. No person can seek to collect the duty from both ends. In other words, he cannot collect the duty from his purchaser at one end and also collect the same from the State on the ground that it has been collected from him contrary to law. The power of the court is not meant to be exercised for unjustly enriching a person. The doctrine of unjust enrichment is, however, inapplicable to the State. State represents the people of the country. No one can speak of the people being unjustly enriched." In the light of the aforesaid, it was urged by the learned counsel for the respondents that the claim of refund could not be entertained if the burden had been passed on the consumer and that a person claiming refund cannot be allowed on the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....x payable under this Act on such transfer from the bills or invoices raised by the sub contractor as payable by the contractor: Provided that no deduction under this sub-section shall be made on the amount on which deduction has already been made under sub-section (1). (3) The amount deducted under sub-section (1) or sub-section (2) shall be deposited into the Government Treasury by the person making such deduction before the expiry of the month following that in which deduction is made. (4) The person making such deductions under sub-section (1) or sub-section (2) shall, at the time of payment or discharge furnish to the person, from whose bills or invoice such deduction is made, a certificate in such form and manner and within such period as may be prescribed.] [(4-A) The person responsible for making the payment to the contractor or sub-contractor shall submit such return of such payments at such intervals, within such period, in such form and verified in such manner, as may be prescribed, but the assessing authority may in its discretion for reasons to be recorded, extend the date for the submission of the return by such person.] (5) Any deduction made in accordance with t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....alance, if any, shall be refunded. (2) If the amount found to be refundable in accordance with sub-section (1) is not refunded as aforesaid within three months from the date of order of refund passed by the Assessing Authority or, as the case may be, from the date of receipt by him of the order of refund, if such order is passed by any other competent authority or Court, the dealer shall be entitled to simple interest on such amount at the rate of twelve percent per annum from the date of such order or, as the case may be, the date of receipt of such order of refund by the Assessing Authority to the date of the refund: Provided that for calculation of interest in respect of any period after the 26th day of May,1975, the sub-section shall have effect as if for the words six months the words three months were substituted and for the words six percent the words twelve percent were substituted. (3) Notwithstanding any judgment, decree or order of any Court or authority, no refund shall be allowed of any tax or fee due under this Act on the turnover of sales or purchases or both, as the case may be, admitted by the dealer in the returns filed by him or at any stage in any proceedings....
X X X X Extracts X X X X
X X X X Extracts X X X X
....7 or by the High Court under Article 226 or Article 227 of the Constitution." The provisions of Section 8-D of the Act makes it apparently clear that is mandatory and the contractee is duty bound to deduct an amount equal to four percent towards tax payable under the Act on account of works contract. The tax which is deducted is on account of the works contract and not for supply of the goods. Sub-clause (5) of Section 8-D of the Act clearly indicates that any deduction made in accordance with the provisions of this Section and credited into the Government Treasury shall be treated as a payment of tax on behalf of the person from whose bills or invoices the deduction has been made, and credit shall be given to him for the amount so deducted on the production of the certificate, referred to in sub-section (4), in the assessment made for the relevant assessment year. In the light of the aforesaid, in the instant case, the admitted position is, that the contractee was duty bound to deduct the tax for the job works done by the petitioner under Section 8-D of the Act. The contractee issued T.D.S. certificate in favour of the petitioner. The said certificate was evidence that the payme....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the assessment proceeding the Assessing Officer found that there was no tax liability upon the assessee. The contention of the learned Standing Counsel that the burden was upon the petitioner to show that he had not passed on the burden of tax to another person is patently erroneous. The concept of unjust enrichment, as evolved by the Supreme Court in Mafatlal Industries (Supra) is not at all applicable in the present circumstances of the case. It is not a case where the petitioner seeks to collect the tax from the purchaser from one end and also collect the same from the State. It is a case where an amount purported towards tax was deducted by a deductee which has been found by the Assessing Officer in the assessment proceeding as not payable by the assessee. Once this finding has been given in assessment proceeding and the petitioner has been held not liable to pay any tax, the question of placing the burden again upon the petitioner, at the time of verification is, wholly misplaced and beyond jurisdiction. Such exercise of placing the burden was permissible only during assessment proceeding and not thereafter. In this regard the court finds that the T.D.S. certificate was acce....