TaxTMI 
TaxTMI 
2014 (8) TMI 817
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....1982. A learned Single Judge of this Court, while noticing this conflict of views, made a reference to the Full Bench By order dated 9 October 2007 in Trade Tax Revision No. 27 of 2007 in the following terms: "In case, where the case is remanded back by the appellate authority to the assessing officer either under Section 9 or Section 10 of the U.P. Trade Tax Act after setting aside the assessment order without any specific direction to refund the amount, whether it is obligatory on the part of the assessing officer to refund the amount and to pay the interest in case, if the amount is not refunded within the specific period." The issue which arises before the Court, turns upon the interpretation of the provisions of Section 29 of the U.P. Trade Tax Act, 1948 (Act of 1948). The revision applicant ("the assessee") entered into a works contract with Escotel Mobile Communications Limited on 18 May 1996 which envisaged carrying out of work in relation to import of equipment and accessories; installation and supervision of equipment installed; and of providing hardware and software for GSM Networking of mobile phones on a turn-key basis in certain parts of India, including west....
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....in terms of the orders passed by the Assessing Authority upon remand). The assessee claimed interest on the ground that the Tribunal had allowed its second appeals by its order dated 27 July 2004, while remanding the proceedings. The application was rejected by the Deputy Commissioner (Assessment), Trade Tax by an order dated 14 June 2005. By an order dated 14 October 2005, the first appeals of the assessee were dismissed by the Joint Commissioner (Appeals), Trade Tax, Meerut. On 13 October 2006, the second appeals filed by the assessee were dismissed by the Trade Tax Tribunal, Meerut. Challenging the orders of the Tribunal, the assessee filed revisions in which the learned Single Judge, by an order dated 9 October 2007, made a reference to the Full Bench. Section 29 of the Act of 1948 provides as follows: "29. Refunds. (1) The assessing authority shall, in the manner prescribed, refund to a dealer any amount of tax, fees or other dues paid in excess of the amount due from him under this Act: Provided that the amount found to be refundable shall first be adjusted towards the tax or any other amount outstanding against the dealer under this Act or under the Central Sales....
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....ssee before the departmental authorities was also allowed and the case was remanded to the Assessing Authority to amend the assessment order along lines similar to the directions issued by this Court. Before the Sales Tax Officer could comply with the mandamus of this Court, the Legislature amended the provisions of the Sales Tax Act with retrospective effect so as to exclude condensed milk from the category of milk under Section 4, as a result of which the turnover of condensed milk ceased to be exempt from sales tax. Consequently, the Assessing Authority did not give effect to the mandamus issued by this Court. The assessee once again filed writ proceedings which were allowed with a direction to the Assessing Authority to comply with the mandamus which had been issued in the previous proceedings. Following this, the Assessing Authority passed an order modifying the assessment and directing a refund. The issue before the Division Bench was, whether the assessee was entitled to interest on the amount refunded and, if so, the date from which interest would commence. The contention of the assessee was that the expression "date of order of refund" in Section 29 (2) should be interpret....
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....o pass specific orders directing the Assessing Authority to refund to the dealer such amount of tax, fees or penalty or other money as may have been realised in excess of due amount. They empower such authorities also to set aside the assessment order and remand the case to the Assessing Authority to pass a fresh assessment order making such further inquiry as may be specified by him. In such cases where the matter is sent back by the authorities under Sections 9 and 10 to the Assessing Authority for passing fresh assessment orders without issuing directions for refund of any amount, it may be that the dealer might become entitled to some refund by virtue of what is contained in the order of remand, but then obligation to refund and to pay interest would not arise till such time as fresh assessment order is not made in pursuance of the remand order. Likewise, apart from the authorities mentioned in Sections 9 and 10 of the Sales Tax Act in suitable cases order of refund or a direction to the Assessing Authority to pass a fresh assessment order may also be made by the High Court in exercise of its jurisdiction under Article 226 of the Constitution. In such cases the obligation to re....
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....ssment order. By putting interpretation on word "due" the Tribunal has held that the amount will be refundable only after fresh assessment. According to it the word "due" in tax matter means a sum payable only after quantification of the amount in the assessment proceedings. This interpretation of the Tribunal, in my view, is out of context. When an assessment order is set aside, varied or annulled in appeal, any excess amount paid by person over and above admitted liability is due to him...." Consequently, the view of the learned Single Judge was that an assessee is entitled to a refund of an amount which is paid or deposited during the pendency of an appeal, which is not referable to an admitted tax liability. The judgment of the learned Single Judge in Hind Lamps was approved by a Division Bench in Ellora Mechanical Products (supra). In that case, the first appeals of the assessee against orders of assessment under the Act of 1948 were dismissed. In the second appeals, the assessee applied for a waiver of pre-deposit and eventually filed writ proceedings in which it was required to deposit a part of the disputed amount of tax and to furnish a bank guarantee for the balance....
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.... Judge in Hind Lamps was called into question before the Supreme Court in an appeal filed by the revenue. By a judgment dated 31 July 2008 in Commissioner of Sales Tax, U.P. Vs. Hind Lamps Ltd.7, the Supreme Court reversed the view of the learned Single Judge of this Court. The issue before the Supreme Court was whether it was open to a dealer to make an adjustment while depositing tax on the basis of tax out, admitted to be payable, of certain amounts which according to him had been deposited in excess for some other assessment periods. To recapitulate, the dealer had claimed that certain amounts which had been paid towards tax had become refundable following an order of remand to the Assessing Authority, issued by the first appellate authority. That amount was sought to be adjusted against the amount payable as tax for a subsequent period. The plea had been allowed, as noted earlier, by a learned Single Judge of this Court. The Supreme Court reversed the judgment of this Court holding that under the proviso to Section 29 (1), the amount must have been found to be refundable and due to be refunded. The Supreme Court held as follows: "The approach of the High Court is clearly er....
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....mount of tax paid in excess of the amount due from him under the Act. Under the proviso, any amount found to be refundable had to be first adjusted towards tax or any other amount outstanding against the dealer under the Act. Sub-section (2) imposes a liability for the payment of interest upon the amount found to be refundable. The liability to pay interest arises if: (i) the amount is found to be refundable in accordance with sub-section (1); and (ii) that amount is not refunded within three months from the date of the order of refund of the Assessing Authority or, as the case may be, from the date of receipt of the order of refund, if such order is passed by any other competent authority or Court. The dealer is thereupon entitled to simple interest at the prescribed rate from the date of "such order" or, as the case may be, the date of the receipt of "such order of refund passed by the Assessing Authority to the date of refund". In other words, an amount, in order to carry interest, must be found to be refundable in accordance with sub-section (1). The liability to pay interest would arise if it is not refunded within three months from the date of the order of refund passed....