TaxTMI 
TaxTMI 
2021 (6) TMI 434
X X X X Extracts X X X X
X X X X Extracts X X X X
....erred an appeal before the Tribunal, numbered as T.A.No.176 of 2016; that the said appeal was allowed in favour of the petitioner on 18.02.2019, whereby the order of the revisional authority - 2nd respondent, holding that the petitioner is liable to pay tax at the enhanced rate of 5%, as introduced w.e.f 15.09.2011, in respect of ongoing works contracts as against the rate of tax of 4% having opted to pay under the composition scheme provided under the Act, was set aside. 3. The petitioner further contends that, upon the appeal being allowed by the Tribunal, the 1st respondent had passed consequential order, by his proceedings, dt. 15.05.2019, termed as "Revised Assessment Order" giving effect to the order of the Tribunal in T.A.No.176 of 2016, dt. 18.02.2019; that by the said revised assessment order, the total excess tax paid by the petitioner was determined in a sum of Rs. 4,44,62,188/-; upon such determination, the petitioner requested for grant of refund of the excess amount of tax paid and had executed an Indemnity Bond undertaking that the petitioner would refund the amount immediately on receipt of demand, if it was detected that the petitioner is not entitled for the said....
X X X X Extracts X X X X
X X X X Extracts X X X X
....underwent few adjournments at the request of the learned counsel appearing for the respective parties to enable them to sort out the issue. 7. After the matter was adjourned on 28.01.2021, the 1st respondent filed a second counter affidavit, on 01.02.2021, wherein the 1st respondent justified the action in not refunding the excess tax paid by the petitioner as determined by the Revised assessment order on the ground that the Revision preferred by the respondents to this Court in TREVC No.29 of 2019 is pending consideration and before the said revision is decided, if the amount of excess tax is refunded, the same would be nothing but predicting the outcome of the decision, besides defeating the purpose of filing of the Revision. By the said counter, the 1st respondent also claimed that a letter dt. 09.09.2019 was addressed by him to the 2nd respondent, who, in turn, addressed a letter, dt. 05.11.2020, to the 3rd respondent recommending to withhold the refund due to the infractions on the part of the assessee as noted therein. Based on the report furnished by the 1st and 2nd respondents, it is stated that the 3rd respondent approved the recommendation to withhold the refund on 28.11....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l the material along with the counter so that the pleadings are complete and not by doing a piecemeal job, to ensure judicial time of the Court is not wasted by adjourning the matter. This is of further importance particularly in matters involving financial implications, as any omission would cause loss to the State exchequer and similarly, a tax payer - citizen is entitled to the amounts due to it in timely manner, so as to arrange its affairs. 12. The 1st respondent, while in the first counter sought to justify his action of not refunding the excess tax paid as determined on the ground of pendency of TREVC, by the second counter affidavit filed, sought to justify such non-payment, on the ground that there are certain tax amounts due from the petitioner. The time gap between the first and second counter affidavits as deposed to by the 1st respondent is of five days i.e. 25.01.2021 and 30.01.2021. Thereafter, within further gap of 13 days, the 1st respondent filed another counter affidavit stating that due to oversight he has failed to mention that the amounts which are claimed to be due from the petitioner as a ground seeking approval from the 2nd respondent for withholding refun....
X X X X Extracts X X X X
X X X X Extracts X X X X
....scribed authority for withholding of refunds under Section 40(2)", and permitted the 2nd respondent to withhold the refund. 15. Perusal of the proceedings dt 28.11.2020 issued by the 3rd respondent, does not indicate any material fact having been considered by the said authority independent of the recommendation of the 1st respondent as forwarded by the 2nd respondent, to form an opinion that the grant of refund would affect the revenue adversely, for according permission to withhold the refund. On the other hand, the proceeding dt. 28.11.2020, except mentioning the preferring of TREVC No.29 of 2019 and extracting the provisions of Section 40(2) of the Act and Rule 59(1) of the Rules, does not indicate any independent opinion being formed by the 3rd respondent for according permission to the 2nd respondent to withhold the refund. 16. A reading of Section 40(2) of the Act shows that the authority prescribed in order to withhold the refund is required to form an opinion that the grant of refund is likely to adversely affect the Revenue. However, the proceeding dt. 28.11.2020 is conspicuously absent of any such opinion being formed by the prescribed authority, who in this case is th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ranting approval, the Deputy Commissioner, in our opinion, is duty bound to consider the facts of the case and record the reasons for which he would like to give his approval for withholding payment of the amount belonging to the assessee. The reasons must be just and proper." "22. The Deputy Commissioner must come to the conclusion that by not withholding the amount of refund, the State would be adversely affected because the State might not be in a position to recover the said amount. The assessee is doing well in business for several years, he is having sufficient assets and there is no possibility of the assessee vanishing into the air without making payment of tax, in our opinion, the Deputy Commissioner, cannot give his approval for withholding the refund. In any case, the Deputy Commissioner must record reasons before granting approval so that in the event of decision of the Deputy Commissioner being challenged, the higher authority or the concerned Court can look into the justification given by the Deputy Commissioner for giving an opinion for withholding payment of the amount belonging to the assessee." "24. The Deputy Commissioner, or, in the instant case, the Commiss....
X X X X Extracts X X X X
X X X X Extracts X X X X
....initiation of Garnishee proceedings from the third parties. Since, the 2nd and 3rd respondents have acted on such recommendation of the 1st respondent, who has failed to discharge his function as a tax administrator, the action of the 2nd and 3rd respondents in approving such recommendation of the 1st respondent, is no less a failure and the 3rd respondent had acted in abdication of the powers conferred on the said authority under the Act. 21. Despite this Court interpreting analogous provision under the erstwhile Andhra Pradesh General Sales Tax Act, 1957, in the case of PULP N' PACK PRIVATE LIMITED V/s. COMMERCIAL TAX OFFICER (2009) 48 APSTJ 205 = (2009) 23 VST 573, and holding that the prescribed authority assessing is required to exercise power independent of the recommendations of the authority, the respondents continue to adopt the approach of merely approving the recommendations of the assessing authority, which practice has been deprecated by this Court in the BSNL's case (supra), while dealing with the provisions of Section 40(2) of the Act. The above said decisions of this Court binds the authorities in the State, under Article 215 of the Constitution of India, bei....
X X X X Extracts X X X X
X X X X Extracts X X X X
....0(2) of the Act, as admittedly, the proceeding of the 3rd respondent is dt. 28.11.2020, - viz., 15 days after the filing of the Writ Petition, and after 'Notice Before Admission' was ordered by this Court, and the learned Standing Counsel appearing for the respondents sought time to get instructions in the matter on 18.11.2020. Thus, till 18.11.2020, the 3rd respondent had admittedly not exercised powers under Section 40(2) of the Act and could not have issued proceedings on 28.11.2020, while this Court is seized of the matter. On the basis of such approval accorded by the 3rd respondent, the 1st respondent had, in one of the counter affidavits audaciously stated that since, permission under Section 40(2) of the Act, has been accorded, the Writ Petition is liable to be dismissed. The said submission of the 1st respondent is not bonafide, but it is malafide. The endeavor on the part of the 3rd respondent in according sanction to withhold refund by proceedings dt. 28.11.2020, thus, clearly appears to frustrate and make infructuous the Writ Petition filed before this Court, which action of the 3rd respondent cannot be countenanced and calls for being admonished. 24. Further, the abov....