TaxTMI 
TaxTMI 
2012 (11) TMI 1044
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.... The pleaded case of the petitioner is that it is a private limited company and engaged in the business of contractor and a registered dealer under the Haryana Value Added Tax Act, 2003 (hereinafter referred to as "the Act") and also under the Central Sales Tax Act, 1956. The petitioner is having TIN No. 06461217440 and is registered at Faridabad in Haryana. The return for the assessment year 2008-09 had been filed which was taken up for scrutiny and assessment was finalized on February 8, 2012. The petitioner was found entitled to refund of Rs. 22,94,392. Since no refund was received, the petitioner approached the authorities and was informed that the audit had raised certain objections in May, 2012. The Deputy Excise and Taxation Commissioner, Faridabad East (hereinafter referred to as "DETC") recommended issuance of refund of Rs. 21,88,947. The Departmental authorities were of the view that the finalization of audit objections would take time, therefore, a surety bond/security from the director of the company be taken to safeguard the interest of the Department. Surety bond was furnished for Rs. 23 lacs on June 13, 2012, which was verified and found to be genuine and solvent. H....
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....ing of notice or affording of opportunity of hearing prior to an order under section 21(2) of the Act. The order under section 21 of the Act is appealable under sections 33 and 36 of the Act. In CWP No. 18723 of 2012 filed prior in point of time, the petitioner had sought refund of Rs. 22,94,392 along with interest. Notice of motion was issued on September 20, 2012, however, thereafter, the withholding order was passed on September 27, 2012 by respondent No. 4 which now is the subject-matter of challenge in CWP No. 20823 of 2012. Accordingly, both the cases are being decided by a common order. Counsel for the petitioner submitted that the order dated September 27, 2012 is a non-speaking order without recording any reasons in writing passed at the back of the petitioner and is liable to be quashed on this ground alone. Under the provisions of the Act in view of section 20 and rules 41 and 42, the authorities were under an obligation to refund the amount within a period of 60 days and thereafter were liable to pay interest at one per cent per month. Counsel for the State, on the other hand, submitted that since a revision notice dated August 28, 2012 had been issued by the D....
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....at arises for adjudication in this case would be whether the respondents were justified in withholding refund under section 21 of the Act. Section 21 of the Act reads as under: "21. Power to withhold refund.-(1) Where an order giving rise to a refund is the subject-matter of further proceedings and the taxing authority interested in the success of such proceedings is of the opinion that the grant of the refund is likely to adversely affect the recovery in the event of success of such proceedings, he may, for reasons to be recorded in writing, withhold the refund and shall, if such authority is below the rank of Commissioner, refer the case, within thirty days of the application for the refund, to the Commissioner for order. (2) If a reference has been made to the Commissioner under subsection (1) in time, he may either pass an order withholding refund or direct that refund be made on furnishing of security except cash security of the like amount or decline to withhold the refund." Section 21 provides that where an order gives rise to the refund and is a subject-matter of further proceedings, then the taxing authority which may be adversely affected in the event of succe....
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..... v. State of Haryana [2009] 24 VST 403 (P&H); [2009] 33 PHT 647 (P&H), while examining the provisions of section 44 of the Haryana General Sales Tax Act, 1973 on the issue of the power to withhold the refund, held that where the Commissioner had failed to record any reasons as to how recovery is likely to be affected it would make the order wholly unsustainable and liable to be set aside. The relevant part of the judgment reads as under (pages 407 and 408 in 24 VST): "7. A perusal of the impugned order dated April 28, 2006 (P8) shows that it has recorded a finding granting approval to withhold refund of Rs. 4,32,21,206 by observing that recovery of the aforesaid amount would be adversely affected later on if the refund is allowed. The Commissioner has failed to record any reason as to how the recovery is likely to be affected. The order is totally laconic as it does not give any reasons. There is not even a whisper of the material forming basis of aforesaid satisfaction by the Commissioner. The impugned order is wholly unsustainable in the eyes of law and is, thus, liable to be set aside. ... 10. In similar circumstances this court has quashed order withholding refund in ....
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....ubject to the approval in the prescribed manner of the prescribed authority who may, by order in writing passed after providing opportunity of being heard to the affected person, change the amount of refund or order that no refund is due. (7) Before any refund is given to any person under this Act it shall be first adjusted with any amount due from him under this Act or the Central Act for any period and the balance, if any, only shall be refunded to him. (8) Any amount ultimately found due to any person, which he paid as a result of an order passed under this Act, shall be refunded to him with simple interest at the rate of one per cent per month for the period from the date of payment to the date when refund is given to him. (9) Any amount, not falling within sub-section (8), refunded after a period of sixty days from the date of making an application under sub-section (5) shall carry with it simple interest at the rate of one per cent per month for the period from the date of making the application to the date when the refund is made. (10) Any amount due to a dealer under sub-section (4) but not refunded to him within sixty days from the date of passing the order all....