TaxTMI 
TaxTMI 
2019 (11) TMI 170
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....ut hereunder: (i) On 16.02.2005, Neyveli Lignite Corporation Limited (NLC) issued a sale order in favour of the petitioner for sale and disposal of a condemned Briquetting and Carbonisation Plant (B & C Plant) as scrap. Tax at the rate of 4% was paid on the sale value. (ii)On 04.07.2005, NLC sought a clarification from the Commissioner of Commercial Taxes as to the rate of tax on the sale of the condemned Plant. (iii)On 15.09.2005, the Commissioner of Commercial Taxes reiterated its earlier instruction dated 04.07.2005 and the rate of tax stipulated therein, being 12%, as machinery. (iv)On 22.11.2005, NLC, on the basis of the clarification issued by the Department informed the petitioner that the Tax differential was being adjusted and recovered from the deposit of the petitioner held by it. (v)On 23.11.2005, NLC, after recovery of the same from the petitioners' deposit remits the differential under protest to its assessing officer. (vi)In the meantime, clarifications dated 04.07.2005 and 15.09.2005 were challenged in W.P.No.39784 of 2005 by the petitioner and on 19.12.2006 the impugned clarifications were set aside and remitted for re-consideration to the file of t....
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....t as against which a contempt application was moved before the Supreme Court in C.No.30 of 2012 in Civil Appeal No.2686 of 2011. (xiv)On 28.09.2012, the contempt application comes to be dismissed by the Supreme Court which granted liberty to the petitioner to seek appropriate remedy against the proceeding dated 16.09.2011 in accordance with law. (xv) Hence, this writ petition, filed on 10.12.2012 pursuant to the order of the Supreme Court dated 28.09.2012. 4.The legal issue that arises in this case is entitlement of the petitioner to interest in terms of Section 24(4) of the Act. 5.The learned Additional Government Pleader appearing for the Revenue argues that the provisions of Section 24(4) of the Act are categoric to state that interest would be payable thereunder only where the excess amount as determined in appeal, revision or review is not refunded to the assessee within a period of 90 days from the date of order of such assessment, revision of assessment or review. According to them, the language of Section 24(4) of the Act is clear and unambiguous in this regard. 6.In this case, the determination of the excess repayable to the petitioner was only on 16.03.2011 when th....
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....admitted facts and circumstances of the present case, the assessee finds no support from the provisions of Section 24(2) of the Act. 9. I had indicated as much in the course of the hearing as a result that, perhaps, the petitioner does not pursue this argument and offers a new one, one that does not arise from the pleadings; that it is entitled for compensation from the Department. The petitioner relies on the judgment of the Supreme Court in the case of Sandvik Asia Ltd. Vs. Commissioner of Income Tax I, Pune and others, (2006) 2 SCC 508) and State of Gujarat Vs. Doshi Printing Press (82 VST 384). 10.In Sandviks' case, the Supreme Court considered a prayer for grant of interest for delay in effecting refund pursuant to an appellate order. After analysing the provisions of Sections 244 and 244A of the Income Tax Act 1961, the Bench concluded that the statute did not provide for the payment of interest as prayed for. However on general principles the Bench held that the assessee ought to be compensated for the inordinate delay in receiving money legally due to it, in that case, seventeen long years. Thus the Department was directed to pay interest at the rate of 9% for part of the....
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....pensated by the Income Tax Department for the delay in paying interest on the refunded amount admittedly due to the assessee. This Court in the facts of the said case had noticed that there was delay of various periods, ranging from 12 to 17 years, in such payment by the Revenue. This Court had further referred to the several decisions which were brought to its notice and also referred to the relevant provisions of the Act which provide for refunds to be made by the Revenue when a superior forum directs refund of certain amounts to an assessee while disposing of an appeal, revision etc. 5. Since, there was an inordinate delay on the part of the Revenue in refunding the amount due to the assessee this Court had thought it fit that the assessee should be properly and adequately compensated and therefore in paragraph 51 of the judgment, the Court while compensating the assessee had directed the Revenue to pay a compensation by way of interest for two periods, namely; for the Assessment Years 1977-78, 1978-79, 1981-82, 1982- 83 in a sum of Rs. 40,84,906/- and interest @ 9% from 31.03.1986 to 27.03.1998 and in default, to pay the penal interest @ 15% per annum for the aforesaid period....
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....nt. 14. To clarify, the Court will note whether the issue on merits in regard to which the refund is sought was one that had been settled for long, but still agitated by the Revenue. The Court will also take into account the trajectory of the litigation to ascertain whether such litigation that had caused the delay had been pursued vexatiously and whether such delay could have been avoided at all. 15. The Full Bench in Gujarat Fluoro has observed in paragraph-7 of the judgement that compensation will be due to the assessee on account of the prejudice caused to it by being made to wait inordinately after the statutory period provided for such refund. Thus, prejudice caused, if any, is also a factor to be taken into consideration. 16. The Division Bench to which the matter stood remanded by the Full Bench has further referred the matter to the High Court for consideration in the light of the principles laid down by the Full Bench. 17. In the present case, I have set out the sequence of events commencing from 2005 in relating to the taxable event giving rise to the refund. In July 2005, NLC had first sought a clarification from the Commissioner in regard to the rate of tax on the....
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...., let alone established by the petitioner before me. Thus, directing the payment of compensation in a case of this nature would tantamount to opening Pandora's box and consequently the flood gates for similar requests. The prayer of the petitioner for compensation is thus rejected. 21. The petitioner relies on a decision of the Gujarat High Court in State of Gujarat vs. Doshi Printing Press (82 VST 384). The petitioner in that case had suffered an order of assessment, preferring an appeal against the same before the Appellate Authority. The authority granted relief pursuant to which the assessee sought a refund of the tax that had been remitted earlier, subsequent to assessment. The request of the assessee was rejected, which order was challenged in appeal before the Tribunal, successfully. 22. The Division Bench before which the revenue carried the matter in further appeal, considered the following question of law: 'Whether the Hon'ble Tribunal has erred in holding that the dealer is entitled to interest under Section 54(1)(AA) on the refund, arising from the appellate order'. 23.The Bench considered the provisions of Sections 41 and 54(1)(AA) of the Gujarat Sales Tax Act, de....
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.... no interest shall be payable where an appeal or revision application is filed or where an application has been made to the Tribunal to refer to the High Court any question of law. Explanation 1.--If the delay in granting the refund within6[the period specified in clause (a) or (b)] is attributable to the dealer, whether wholly or in part the period of the delay attributable to him shall be excluded from the period for which interest is payable. Explanation 2.--In case of an order relating to refund passed in appeal or in revision, the period of ninety days shall be calculated from the date of the receipt of such order by the Sales Tax Officer. (2) Where any question arises as to the period to be excluded for the purposes of calculation of interest under the provisions of this section, such question shall be determined by the Commissioner whose decision shall be final. 24. In that case, the request for refund had been rejected on the ground that the refund arose consequent to an appellate order whereas the entitlement to refund in terms of Section 54 was only pursuant to an assessment order. In that context, the Bench held that an order of assessment passed by a competent au....