2012 (1) TMI 145

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....544 of 2011 is seeking issuance of a writ in the nature of mandamus directing the respondents to refund penalties of Rs. 2,70,800 and Rs. 2,95,903 taken as cash security for the release of goods. The order imposing the penalty was set aside by the appellate authority. The assessee was held entitled to claim of the refund along with interest. Reliance was placed upon section 51(10) of the Punjab Value Added Tax Act, 2005 (in short, "the Act"). 3. During the pendency of the aforesaid writ petition, in the reply filed by the respondents, a copy of order dated June 24, 2011 had been appended wherein the amount was sought to be withheld by taking recourse of section 41(1) of the Act. On the basis of the order dated June 24, 2011, the amount o....

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....P No. 19172 of 2006 (Ratti Woollen Mills v. State of Punjab [2007] 9 VST 105 (P&H)) decided on February 1, 2007. 8. It would be advantageous to refer to section 41(1) of the Act which reads thus: "41. Power to withhold refund in certain cases.-(1) Where an order giving rise to a refund is the subject-matter of an appeal or further proceeding or where any other proceeding under this Act is pending, and the officer competent to grant such refund is of the opinion that the grant of the refund is likely to adversely affect the revenue, such officer may, with the previous approval of the Commissioner, withhold the refund till such time, as may be determined. (2) . . ." 9. This court considering the scope of section 41(1) of the Act i....

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....is blissfully silent as to how the refund would adversely affect the recovery. The order is absolutely laconic. There is not even a whisper of the material on the basis of which satisfaction has been recorded by the Commissioner. Accordingly, the same cannot be sustained in the eyes of law nor can the same be relied upon for the purpose of defeating the claim of the petitioner." 10. The respondents while withholding the amount under section 41(1) of the Act had nowhere recorded any satisfaction that the withholding of the refund was in the interest of the Revenue. As the legal requirements as envisaged under section 41(1) of the Act are not satisfied, CWP No. 14972 of 2011 is allowed and order dated July 22, 2011 (annexure P5) is quashed....