TaxTMI 
TaxTMI 
2022 (3) TMI 1054
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.... (for short 'Commissioner') was affirmed. 2. Brief facts of the case are that the petitioner is a registered dealer under the Himachal Pradesh Value Added Tax Act, 2005, (in short 'VAT Act'). The Assessing Authority, Baddi, District Solan, H.P. assessed the petitioner for the year 2010-11 under the VAT Act and also the Central Sales Tax Act, 1956. The assessment order was issued on 29.09.2011. A total sum of Rs. 1,31,43,515/- was assessed as excess Input Tax Credit (for short 'ITC'), out of which a sum of Rs. 49,27,694/- was applied towards the payment of due Central Sales Tax and balance of Rs. 82,15,821/- was assessed as excess Input Tax Credit, which was ordered to be carried forward to the next year under Section 12(4) of the VAT Act. Petitioner made a request for refund of ITC, however, he was directed to file separate application for refund by the Assessing Officer. 3. Petitioner submitted requisite application for refund of excess ITC of Rs. 82,15,821/-. Refund, as applied by the petitioner, was recommended by Assistant Excise and Taxation Commissioner, Baddi, Barotiwala and Nalagarh (AETC-BBN) on 02.11.2011. While considering the refund application of the peti....
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....s Samana Industries Limited is enjoying incentive of deferred payment of tax scheme while exercising option under notification No. EXN-F(1)-2/2004 dated 26.07.2005 for which the Assessing Authority Nalagarh has issued a necessary certificate (Deferment Certificate No. 005) for the period 14.08.2009 to 13.08.2014 covering the period of commencement of commercial production w.e.f. 14.08.2009. As per report of ETO Nalagarh dated 21.05.2012, M/s Samana Industries Limited has claimed deferment to the tune of Rs. 17,06,715/- on VAT payable for Rs. 70,85,283/- i.e the amount of Rs. 17,06,715 has not been deposited into government treasury due to option exercised for upfront payment of tax as per aforesaid notification. The amount of tax which has not gone into Government treasury does not become refundable to the dealer as the amount cannot be refunded out of air. For granting refund, the first and foremost requirement is to allow refund only against specific payment or deposit of tax/ demand and where no amount has been deposited, there exists no provision under law to refund such amount. The application for refund cannot be entertained to the extent of the amount of clai....
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.... Samana Industries Ltd. had claimed deferment to the tune of Rs. 17,06,715/- on VAT payable for Rs. 70,85,283/- and thus, a sum of Rs. 17,06,715/- had not been deposited into the Government Treasury as M/s Samana Industries Ltd. had opted for upfront payment of tax in accordance with notification No. EXN-F(1)- 2/04, dated 26.07.2005. Since the amount of Rs. 17,06,715/- had not gone into the Government Treasury, hence, according to the learned Commissioner, the same was not refundable to the dealer. 9. In appeal, learned Tribunal upheld the dis-allowance of Rs. 17,06,715/-, ordered by the learned Commissioner, on the grounds that the petitioner was not entitled to avail the refund against the amount which was not deposited by the selling dealer i.e. M/s Samana Industries Ltd. by availing the benefit of deferment scheme, and also that refund to the extent of Rs. 17,06,715/- was unverifiable under Section 11(7) (c )(iii) of the Act. 10. Since the learned Tribunal has upheld learned Commissioner's order by placing reliance on Section 11(7)( c)( iii) of the Act, we deem it proper to answer question of law at serial No. (ii) above, in the first instance. 11. Section 11(7)(c)(iii....
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....ied system of registration, maintenance of accounts, filing of returns may also be prescribed which shall remain in force during the period of such composition". 13. Section 7 of the Act provides an option to a registered dealer under the Act to pay fixed presumptive tax on the entire taxable turnover of the sales and purchase at the rates to be prescribed by the Government. A dealer having opted to pay presumptive tax under aforesaid provisions of Act is precluded to avail ITC. To bar a dealer from claiming ITC under Section 7 of the Act, it is necessary to be proved that such dealer firstly was entitled to opt and secondly had opted to pay presumptive tax. In the facts of the case in hand, there is nothing to suggest that the selling dealer i.e. M/S Samana Industries had opted to pay presumptive tax or had ever paid it. 14. As regards the applicability of section 16(2) of the Act to attract disqualification under section 11(7)(c)(iii), we find the conclusion drawn by learned Tribunal in that behalf to be clearly misplaced. The aforesaid provision of the Act clearly provides that the State Government has power to accept from any class of dealers, a composite or lump sum amou....
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....te it shall allow the dealer to complete the same by affording an opportunity of being heard. (5) A dealer paying lump-sum shall pay the lump-sum in equal quarterly installments payable within thirty days of the expiry of each quarter and shall, in proof of the payment so made, furnish to the appropriate Assessing Authority, a treasury receipt. (6) The dealer opting to pay the lump-sum shall not issue a tax invoice under section 30 and the input tax credit in respect of goods purchased from such dealer shall be nil, and such dealer shall also not be entitled to claim any input tax credit on the purchase of goods made by him. (7) The dealer opting to pay lump-sum shall be entitled to charge tax as may be prescribed. (8) Notwithstanding anything contained in this Chapter, the State Government may at any time withdraw the facility of making payment of the lump-sum from any or all class(s) of dealers." Rules 46 to 49 deal with specific classes of dealers i.e. brick kiln owners, laboratory dealers, work contractors and village industries etc. Rule 50 deals with dealers other than those covered under Rules 46 to 49. As per above provisions, one is a....
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....id Scheme, the following para-5-A shall be inserted, namely:- "5A. Option by industrial units-(I) Notwithstanding anything contained in para 5 of the said Scheme, the new and existing eligible industrial units other than those specified in the negative list, which have come into commercial production before 07.01.2003 and which, after the approval of the Director of Industries or other officers so authorized by him, undertake substantial expansion only after 07.01.2003 may either continue to avail such facility or by making an application in Form S.T. (DP)-VII opt to pay 65% of the tax liability, for any tax period of a financial year, according to the return and upon making such payment, he shall be deemed to have paid the tax due from him according to such return. The option once exercised shall be final. (2) The registered dealer (industrial unit) making payments of tax under sub-para(I) of this para shall be entitled to input tax credit under Section 11 of the Himachal Pradesh Value Added Tax Act, 2005 in respect of intra-State sales, inter-State sales or transfer of goods on consignment basis or branch transfer basis." The genesis of notification dated 26.....
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....ntive of exemption from tax under the preceding proviso, allow only the facility of making deferred payment of tax, subject to such conditions as it may specify therein.] 19. The first proviso to Section 62(5) of the Act enables the State to issue notification and allow any dealer to avail of any incentive on tax, if such incentive has been declared by the State before the commencement of the VAT Act. In exercise of such powers, the State Government issued notification dated 19.01.2006 and allowed the incentive of deferment to new and existing Industrial Units by applying all terms and conditions specified in deferment scheme. 20. The lump-sum payment of composite tax under Section 16(2) of the Act in no way can be equated with the powers of State under Section 62(5) of the Act as both have separate and distinct fields of operation. There cannot be any overlapping between the two provisions, therefore, disallowance of Rs. 17,06,715/- payable from ITC to the petitioner by invoking the provisions either of Section 7 or Section 16(2) of the Act is wholly illegal and against the mandate of law. 21. The question of law under consideration is thus answered accordingly. It....
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....as not been the case of the department that the claim of the petitioner for ITC refund was not tenable. In such circumstances, to deny a part of claim of refund by applying Section 7 or Section 16(2) of the Act is clearly arbitrary. Even the principle of proportionality cannot be applied in cases where provisions of law are not juxtaposed, rather have their application in different situations. 23. There is no dispute on facts that the selling dealer i.e. M/s Samana Industries Limited had initially availed the benefit of deferred payment subsequently converted to upfront payment of 65% of the payable amount by virtue of provisions of notification dated 26.07.2005. It was provided in said notification that the upfront payment of 65% of the tax liability for any tax period of financial year shall be deemed to be payment of the tax due according to the return of the assessee. Therefore, deficit, if any, of 35% in receipt of tax suffered by the State was its voluntary Act under a scheme formulated by it. Such deficit to the State coffers cannot be made basis for penalizing the petitioner who was not at fault. 24. The questions of law at serial No. (i) and (iii) are accordingly ans....