TaxTMI 
TaxTMI 
TaxTMI 
2022 (11) TMI 1274
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....nt herein, M/s. Tata Steel Limited (hereinafter referred to as the writ petitioner). The appellants are the Commissioner of Commercial Taxes West Bengal and the Joint Commissioner, Commercial Taxes Large tax payers Unit, Government of West Bengal, who were impleaded as the Respondents No. 2 and 3 in the writ petition. The fourth respondent in this appeal and the first respondent in the writ petition is the State of West Bengal represented by the Secretary, Department of Finance, Government of West Bengal who has been shown as the proforma respondent in this appeal. 2. The writ petition was filed for issuance of writ of certiorari to quash the assessment order dated June 30, 2020 passed by the second appellant in the case of the Indian Oil Corporation Limited (IOCL), the fourth respondent in the writ petition and the third respondent herein. By the impugned order, a bunch of writ petitions were allowed, pertaining to the assessment year 2017-2018 to the extent of submissions of Form "C" declaration by IOCL pertaining to the writ petitioner which was denied with consequential directions to the appellants as well as the State of West Bengal to refund the amount of Rs. 24,61,31,232/- ....
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....the State of Jharkhand. Prior to 01.07.2017, the writ petitioner was issued Form "C" declaration by the State of Jharkhand which was submitted to IOCL, who in turn submitted the same to the prescribed authority in the State of West Bengal to claim concessional rate of tax in terms of Section 8 of the CST Act. With effect from July 1, 2017 the definition of "goods" as defined under Section 2(d) was amended by Taxation Law (Amendment) Act, 2017. On October 11, 2017, the State of Jharkhand issued a circular stating that Form "C" declaration will no longer be issued to dealers if the final products manufactured by them do not fall within the amended definition of "goods" in Section 2(d) of the CST Act. By office memorandum dated November 7, 2017,the Ministry of Finance, Department of Revenue, Government of India, issued a clarification with regard to the definition of "goods" in Subsection (3) (b) of Section 8 of the CST Act, clarifying that the term "goods" referred to in Section 8 (3) (b) of the CST Act will have the same meaning as defined and amended under Section 2(d) of the CST Act, however it will not affect the provisions of the Section 8(3) (b) of the CST Act relating to tele-....
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....the writ petitioner and that being an admitted case, it was held that the provisional credit notes given to the writ petitioner shall be given effect to, or in any case in which the provisional credit notes have not been given, the required refund shall always be given to the writ petitioner. Further it was observed that if the respective oil companies have made deposit to the state exchequer, they shall also be entitled to claim the refund thereof. 6. The assessment in the case of IOCL was completed by order dated June 30, 2020 disallowing the claim for concessional rate of tax for the financial year 2017-2018 on the ground that tax was charged, collected and deposited at full rate by IOCL and that IOCL had not filed revised return for claiming concessional rate of tax, they have not submitted amended invoices for claiming concession and credit notes have not been issued by the IOCL. Aggrieved by such order of assessment, IOCL had preferred appeal before the First Appellate Authority which is still pending. On account of the above development, IOCL by their letter dated August 31, 2020 informed the writ petitioner that their assessment for the financial year 2017-2018 has been co....
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....ned relief. The said writ petition along with the other connected matters was allowed by common order dated December 6, 2021 which is impugned in this appeal. The learned Single Bench framed nine issues which in the opinion of the Court was both factual and legal. The issues were elaborately framed which have been concisely reframed by the learned Advocate General in the following terms:- Issues:- (i) Locus Standi of the writ petitioner/purchasing dealer to maintain the writ petition for refund of excess CST collected by IOCL and remitted to the Government of West Bengal. (ii) Whether filing of Form "C" declaration by the selling dealers is mandatory? Can Form "C" declaration be filed belatedly? (iii) Whether the assessment order dated June 30, 2020 is liable to be set aside due to the rejection of the Form "C" declaration by the assessing authority? (iv) Whether the writ petitioner is entitled to concessional rate of tax, who have admittedly fulfilled the conditions under Section 8 of the CST Act? (v) Whether the writ petitioner is entitled to claim refund of tax directly from the state or should they claim the refund from the selling dealers (IOCL)? (vi) Whether the....
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.... of tax. Referring to Section 6,7,8 and 9 of the CST Act, it is submitted that there is no liability imposed on the purchasing dealer under the CST Act and the concessional rate of tax in terms of Section 8 is given only to the selling dealer and there is no right recognized in favour of the purchasing dealer. Similarly, Section 9 of the Act provides for levy and collection of tax only from the selling dealer. 10. Referring to Section 60 of the West Bengal Sales Tax Act (WBST) and Section 62 of the West Bengal Value Added Tax Act (WBVAT), it is submitted that those provisions provided for refund of excess tax only to be paid to the selling dealer and there is no right conferred on the purchasing dealer under the statute to claim refund. In support of such contention, reliance was placed on the decision in Tata Iron and Steel Company Limited Versus State of Bihar AIR 1958 SC 452, M/s. George Oakes Private Limited Versus State of Madras AIR 1962 SC 1037, Central Wines, Hyderabad Etc. Versus Special Commissioner Tax Officer Etc. (1987) 2 SCC 371 and Mahalaxmi Cotton Ginning Pressing and Oil Industries Versus State of Maharashtra (2012) SCC Online Bom 733 and the order passed by the H....
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....s submitted that Section 37 is not applicable to the facts of the case as the case on hand does not relate to excess tax paid to the authority. The said provision relates to excess amounts collected by the selling dealer from the purchaser in contravention of the provisions of the act and not deposited to the authority as tax and only in those situations the selling dealer is obligated to deposit the excess amount collected to the RBI or the Government Treasury and only after such deposit the purchasing dealer can apply for refund of this excess amount. Therefore, it is contended that Section 37 does not relate to tax paid to the authorities by the selling dealer for which only the selling dealer is entitled to claim refund. Therefore, it is contended that the order of the learned Single Bench recognizing an independent right on the purchasing dealer in terms of Section 37(3) of the WBST Act is not sustainable. Hence the reliance placed by the writ petitioner on the decision in R.S. Joshi, S.T.O. Gujarat Etc. Versus Ajit Mills Limited, Ahmedabad & Another (1977) 4 SCC 98 as also the reliance placed on the decision in Kasturi Lal Harlal Versus State of U.P. & Others (1986) 4 SCC 704....
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....sing dealer de hors the provisions of the statute, even though the burden of tax may have been passed on by the selling dealer to the purchasing dealer. Therefore, it is submitted that in terms of Section 60 of the WBST Act only the selling dealer is entitled to claim refund. Therefore, it is submitted that the decision in Saraf Trading Corporation is clearly applicable to the case on hand. 18. The learned Advocate General to support the argument that taxing authority is only concerned with the assessee and not any other third party with whom the assessee may have contractual relationship, placed reliance on the decision of the Hon'ble Supreme Court in Rashtriya Ispat Nigam Limited Versus M/s. Dewan Chand Ram Saran (2012) 5 SCC 306 and the decision of the High Court of Delhi in Delhi Transport Corporation Versus Commissioner of Service Tax (2015) SCC Online Del 8786. 19. For the proposition that there is no equity about tax, reliance was placed on the decisions of the Hon'ble Supreme Court in Commissioner of Income Tax, Madras Versus Ajax Products Limited AIR 1965 SC 1358 and Commissioner of Income Tax Versus Sh. Madho Pd. Jatia (1976) 4 SCC 92. 20. It is further submitted that ....
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....Census Commissioner Versus R. Krishnamurthy (2015) 2 SCC 796 and Kulwant Singh & Others Versus Daya Ram & Others (2015) 3 SCC 177. 24. Further it is submitted that the decisions of the other High Courts are not applicable in the case on hand for several reasons and more particularly, have not taken into consideration the decisions of the Constitution Bench of the Hon'ble Supreme Court in Tata Iron and Steel Company Limited and George Oakes Private Limited. It is further contended that the decision of the Hon'ble Supreme Court in Commissioner of Commercial Taxes Versus Ramco Cements Limited (2021) SCC Online SC 3209 by which the appeal filed before the Hon'ble Supreme Court was dismissed by agreeing with the view taken in Capro Powers Limited and Tata Iron and Steel Company Limited but the said order is a simple dismissal of the special leave petition from an order passed by the High Court of Madras. 25. Alternatively, it is submitted that even if the decision of the High Court of Jharkhand is accepted and the writ petitioner applies for refund, such refund could only be claimed from IOCL and not from the State of West Bengal. 26. Further, it is submitted that the circular dated ....
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....t assessment order can be set aside only by following the provisions of the statute, reliance was placed on the decisions of Hon'ble Supreme Court in State of Madhya Pradesh Versus Haji Hasan Dada AIR 1966 SC 905 and Sales Tax Officer, New Delhi Versus East India Hotels Ltd. And Anr. (1988) 9 SCC 662. 31. It is submitted that Act nowhere provides that the purchasing dealer would be entitled to the concessional rate automatically by submission of Form "C". The decision in the State of Tamil Nadu Versus Arulmurugan and Company is also to the said effect. Such an argument proceeds on the assumption that it is the buyer being taxed under the Act, which is incorrect. Further this argument if accepted would also amount to doing away with the provisions for furnishing returns, scrutiny thereof, assessment, levy refund of tax, all of which relate to the seller. After referring to Sections 2(h) (j), 8, 8A, 9(2) of the CST Act, Section 30 and 45 of WBST Act, and Rule 8 of the WBCST Rules, reliance was placed on the decisions of the Hon'ble Supreme Court in Kamala Mills Ltd. Versus State of Bombay AIR 1965 SC 1942 and Kamal Brothers and Others Versus The State of Uttar Pradesh and Anr. (1983....
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....liance was placed on the decision of the Hon'ble Supreme Court in Mafatlal Industries and Others Versus Union of India (1997) 5 SCC 536. 36. Further it is submitted that there is no question of unjust enrichment of the State. The benefit being a concession could be claimed upon strict compliance of the conditions. That apart, it is only IOCL who can claim such concession and not the writ petitioner. 37. With regard to the order directing payment of interest, it is submitted that interest on refund should strictly confirm to Section 34, and modification of the period of charging interest in contravention of the provisions of the statute is not called for. The decision relied on by the writ petition in Union of India (UOI) Through Director of Income Tax Versus Tata Chemicals Limited (2014) 6 SCC 335 was sought to be distinguished by submitting that in the said decision, the Hon'ble Supreme Court was dealing with the specific language of Section 244A of the Income Tax Act, 1961 which provides for calculation of interest from date of payment of tax, which provision is different from Section 34 of WBST Act. 38. It is further submitted that in case this Court decides against the appel....
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....f Wealth Tax, Meerut Versus Shravan Kumar Swarup & Sons (1994) 6 SCC 623, it is submitted that filing of returns is only a part of machinery provision and cannot override the substantive claim of concessional rate of tax. 41. For the proposition that the purpose of assessment proceedings before the assessing authority is to correctly assess the tax liability, reliance was placed on the decision in National Thermal Power Company Limited Versus Commissioner of Income Tax (1997) 7 SCC 489, Jupiter International Limited Versus The Senior Joint Commissioner Sales Tax (2014) SCC Online Cal 4122, Commissioner of Income Tax Versus Bharat General Reinsurance Company Limited (1970) SCC Online Del 301, The Commissioner of Income Tax, Chennai Versus M/s. Abhinitha Foundation Private Limited (2017) SCC Online Mad 1978, and Principal Commissioner of Income Tax-I Versus Anugraha Valve Castings Limited MANU/TN/7483/2019. 42. With regard to the effect of the decision of the High Court of Jharkhand, it is submitted that the writ petitioner is entitled to Form "C" and consequently concessional rate of tax. Such claim cannot be denied on technicalities, especially when the decision has become final ....
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.... Limited & Others (2021) 9 SCC 657. 45. The following decisions were relied on for the proposition that payer of tax is entitled to challenge the excess levy/collection of tax. * I.D.L Chemicals Limited Versus Union of India & Others (1996) 5 SCC 373 * Jharkhand State Mineral Development Corporation Limited Versus Central Coalfields Limited & Others in WP (C) No. 3318/2018. * Indian Explosives Limited Versus Commissioner, Sales Tax, U.P. & Others (1975) SCC Online All 503 46. To support the argument that the appeal remedy availed by IOCL is illusory as already the first appellant, the highest administrative authority has already taken a stand in the writ petition by filling an affidavit-in- opposition, reliance was placed on the decision of the Hon'ble Supreme Court in M/s. Filterco & Another Versus Commissioner of Sales Tax, Madhya Pradesh & Another (1986) 2 SCC 103. 47. With regard to the decisions in George Oakes and Central Wines, relied on by the learned Advocate General, it is submitted that in those cases the definition of the term "turnover" which included taxes collected from buyers was under challenge. The Hon'ble Supreme Court held that the principal liability t....
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....visited with penalty under Section 10(f) of the CST Act, similarly if the buyer contravenes any of the provisions relating to the goods purchased at a concessional rate penalty is attracted under Section 10(a) to 10(e) of the CST Act. A combined reading of the aforesaid provisions clearly shows the CST Act contemplates the passing of the burden of tax to the writ petitioner by IOCL. In such an eventuality, the recovery of tax by IOCL is only as an agent of the State of West Bengal. In this regard, reference was made to paragraph 12 of Central Wines. Reliance was also placed on the decision of Hon'ble Supreme Court in Anand Swarup Mahesh Kumar Versus Commissioner of Sales Tax (1980) 4 SCC 451. 50. It is submitted that the decision of the High Court of Bombay in Mahalaxmi Cotton has no bearing to the present dispute. 51. Thus, in none of the four judgments referred by the learned Advocate General the issue was refund of taxes and the controversy was regarding the legislative competence of the State Government to include taxes received from the buyer as part of the turnover of the seller. 52. It if further submitted that a plain reading of Section 37(3) of the WBST Act shows that a....
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....nificantly different from Section 37(3) of WBST Act. It is submitted that learned Advocate General referred to Section 46A(2) of the Kerala General Sales Tax Act which provision was not considered in Saraf Trading Corporation. In Corporation Bank, it was held that the buyer was entitled to refund however, this decision was not noticed in Saraf Trading Corporation. On the similar issue as to the entitlement of buyer maintain a claim for refund the decision of the High Court of Gujarat in J.K. Cements Limited Versus State of Gujarat in Special Civil Appeal No. 15333 of 2019 dated 18.12.2019 was referred. The Special Leave petition filed by the State of Gujarat before the Hon'ble Supreme Court in Special Leave Petition (C) No. 2279-2280 of 2021 was dismissed by order dated 10.02.2021. For the same proposition, reliance was placed on the decision of the High Court of Punjab and Haryana in ASI Industries Limited Versus State of Haryana & Others MANU/PH/0085/2021. 56. With regard to the contention that there can be no question of unjust enrichment in the case of the writ petitioner, reliance was placed on the decision of the Hon'ble Supreme Court in Indian Council for Enviro-legal Actio....
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....t Bengal in these proceedings is diametrically opposite to what was taken earlier. With the above submissions Mr. Gulati concluded. 59. Mr. Khan, learned Counsel for IOCL, while adopting the submissions of Mr. Gulati, submitted that before 01.07.2017 there was no dispute about the entitlement of the writ petitioners, it is only after the amendment to the definition of "goods" in Section 2(d) of the CST Act, dispute arose. The Circular issued by the State of Jharkhand was challenged by the writ petitioner was quashed by the High Court of Jharkhand by order dated 28.08.2019 and directions were issued. The review petition filed by IOCL was dismissed with the observation that if State of West Bengal refused refund it is open to the writ petitioner or IOCL to approach the appropriate forum for relief. It is submitted that the Form "C" declarations furnished by the writ petitioner was furnished to the assessing officer by IOCL. By order dated 12.08.2020, for the assessment year 2017-2018 the assessing officer rejected the Form "C" declarations on a hyper technical ground that IOCL has not filed revised returns, the invoices were not revised and credit notes were not issued by IOCL. The ....
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....s pointed out that the duty of the assessing officer is not merely to impose tax that is lawfully excisable but also to give the assessee the benefit of any reduction or exemption that may become due to them upon facts actually found to be true by the assessing authorities, whether or not the assessee out of ignorance or by mistake, make a claim thereto, when the mistake is so obvious and the matter is taken up on appeal, it is the duty of the appellate authorities to correct the mistake. 64. It is submitted that several purchasers like the writ petitioners have paid excess tax, which stands deposited with the State of West Bengal, had filed similar writ petitions which were allowed, but only one appeal has been preferred and those writ petitioners seek to join in this appal for which applications have been filed. 65. It is submitted that after the writ petitioners were allowed the assessing authority has verified all transactions of IOCL with purchasers including the writ petitioner where excess tax was collected and deposited with the State Exchequer, and who have already furnished Form "C" declarations. The details of the transactions and the amount of refund claimed have been....
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.... refund against the seller's state. The decision in Tata Chemicals relied on by the writ petitioner for grant of interest on the refund, is sought to be distinguished by contending that in the said case the Hon'ble Supreme Court was dealing with the specific language of Section 244A of Income Tax Act, 1961, which is different from Section 34 of the WBST Act. Section 244A of the Income Tax Act, 1961provides for interest calculation from the date of payment of tax, whereas there is no such provision in Section 34 of WBST Act, therefore no interest is payable. It is further submitted that the High Court of Rajasthan in Hindustan Zinc Limited Versus The State of Rajasthan and Others 2018-VIL-233 Raj, the court held that the petitioners therein shall be entitled to refund and/or adjustment of the same from the concerned authorities who collected the excess tax. 70. We have heard the learned Counsels for the parties and carefully noted their submissions. 71. The core issue involved in this appeal is whether the writ petitioner has locus standi to claim refund of the excess tax collected directly from the state of West Bengal and whether can be stated to be a person aggrieved over that ....
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.... the appropriate state under the Sales Tax Law of that state. The goods referred to in Sub Section 1 of Section 8 of the Act on which the liability to pay tax arises have been enumerated under Sub-Section 3 of Section 8. Sub-Section (4) of Section 8 states that the provisions of Sub Section (1) shall not apply to any sale in the course of interstate trade or commerce unless the dealers selling the goods furnishes to the prescribed authority in the prescribed manner a declaration duly filled and signed by the registered dealer to whom the goods are sold containing the prescribed particulars in a prescribed form obtained from the prescribed authority. The proviso states that the declarations should be furnished within the prescribed time or within such time as that the authority may for "sufficient cause", permit. Sub-Section (5) empowers the State Government to exempt dealers from payment of tax or lower rate of tax as spelt out under Clauses (a) and (b) of Sub-Section (5). In exercise of the powers conferred under Section 13 of the CST Act, the Central Government notified the Central Sales Tax (Registration and Turnover) Rules, 1957. In terms of Rule 12(1), the declaration and the ....
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...." declarations filed by the registered dealer at the appellate stage either under the CST Act or the Rules made thereunder. While answering the question, it was held that the proviso in the Act simply says that "C" Form shall be filed before the prescribed authority either within the prescribed time or within such further time as that authority may for "sufficient cause", permit. It was pointed out that as a matter of construction of the proviso in the statute, if there is "sufficient cause" further time will have to allowed. The proviso to the section does not insist that the assessee should establish before the prescribed authority that he was prevented by "sufficient cause" from filing "C" Forms in time, though "sufficient cause" spoken of by Parliament in Section 8(4) is sufficient cause which appeals to the mind of the authority concerned and which enable it to allow further time without bothering about any onus on the assessee. The proviso to Rule 12(7) however, is a study in contrast. The power to allow further time under this Rule is severely circumscribed by the language of its proviso. It was further pointed that this proviso is more of less fashioned after Section 5 of t....
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....rovisions requiring filing of declaration forms "C" along with the return is a directory provision and not mandatory provision. The declarations forms can be filed before the appellate authority as an appeal is continuance of the assessment proceedings. The appellate authority if satisfied that the assessee was prevented by reasonable and sufficient cause which disenabled him to file the forms in time it can be accepted. It can also be accepted as additional evidence in support of the claim for reduction. On the facts of the said case, it was noted that the company had made a specific request before the revisional authority which was turned down and therefore it was held that the question of any non- compliance with the relevant statute does not arise. The decision in the case of M/s. Sahney Steel and Press Works Limited Versus Commissioner Tax Officer (1985) 4 SCC 173 was noted where in it was held that in the given case the assessee can be given an opportunity to collect declaration forms and furnish them to the assessing authority, if the challenge of the assessee to the taxability of a particular transaction is turned down. 76. In Radio and Electricals Limited, the Hon'ble Sup....
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....thority but in the proper case the prescribed authority which would mean to be the assessing authority may permit such forms to be filed within further time as he may permit and this necessarily means that the assessing authority will complete the assessment but at the same time permit the dealer to file form "C" within time specified by him. It was further held that in case, the dealer files form C within the time specified, it is obvious the assessing authority will revise the order of assessment granting the requisite relief. 78. The legal principle that can be culled out from the above decision is that when Form "C" declarations are filed beyond the time prescribed the prescribed authority is empowered to accept such forms on being satisfied that the dealer was prevented by "sufficient cause" for not filing the forms within the time prescribed. In the instant case, the appellants/state have not raised any such contention that the dealer has not shown "sufficient cause" for having not been able to produce the form "C" declaration along with their returns or within the time prescribed. Thus, it goes without saying that the appellants are aware of the legal position as time limit....
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....iling revised return under Section 30(6) had expired. If that be so can IOCL be compelled to do an act which is legally impermissible and impossible to perform. The Hon'ble Supreme Court in Cochin State Power and Light Corporation Limited applied the maxim lex non cogitia ad impossible and held that the performance of an impossible duty must be excused. Therefore, on this ground also the appellants were wholly unjustified in taking a stand that IOCL ought to have filed revised return. In any event filing of a return is a procedural aspect forming part of the machinery provision under the statute and such machinery provision cannot override the substantive claim of concessional rate of tax. 80. In Sha Sukraj Peerajee, the question which arose for consideration was whether Rule 21A of the Madras Sales Tax Rules is intra vires of the power of the State Government under Sections 19(1)(2)of the Madras General Sales Tax Act, 1939. Section 3(1) of the said Act is the charging section which imposes a liability to pay sales tax on every dealer for each year and the tax is to be calculated on his turn over for that year. The question was whether the State Government has the authority under ....
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....ll the powers which the original authority may have in deciding the question before it subject to the restrictions or limitations if any prescribed by the statutory provisions. 81. In Goetze (India) Limited, the assessee claimed a deduction under provision of the Income Tax Act after filing the return. The deduction was disallowed on the ground that there is no provision under the Income Tax Act to make amendment in the return of income by modifying the application at the assessment stage without revising the return. The assessee therein filed appeal before the Commissioner (Appeals) which was allowed. However, on an appeal filed by the department before the Tribunal the order was set aside and the assessee approached the Hon'ble Supreme Court contending that it is open to the assessee to raise the points of law even before the appellate tribunal. To support such contention, the assessee relied upon the decision in National Thermal Power Corporation Limited Versus Commissioner of Income Tax (1998) 229 ITR 383 (SC). The Hon'ble Supreme Court though dismissed the appeal held that the case is limited to the power of the assessing officer and does not impinge on the power of the Incom....
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....ower of tribunal under Section 254 of the Income Tax Act, 1961 cannot be curtailed, after referring to the decision in Goetze (India) Limited and the facts of the case it was noted that the assessee therein was only claiming expenditure which was left out at the time of filing of original income tax return and noting that the assessing officer has power to make upward or downward adjustment in the income return filed by the assessee and when the assessee had not claimed certain expenditure clearly evident from the records and it comes to the knowledge of the assessing officer at the time of assessment proceedings, the assessing officer should grant relief to the assessee. Thus, on a cumulative application of all the above legal principles leads us to the only conclusion that can be arrived at is that the stand taken by the appellant for refusing to accept Form "C" declaration filed by IOCL is unsustainable in law, arbitrary and perverse. 83. We will now revert back to the decision of the High Court of Jharkhand wherein the challenge was to the circular issued by the State of Jharkhand refusing to issue Form "C" declarations on ground of the amendment made to Section 8 of the CST A....
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....etitioners therein from the oil companies in the State of Gujarat and used in the generation or distribution of electricity at its power plant in Haryana. Further it was observed that in the event the petitioners therein had to pay oil companies any amount on account of the wrongful refusal of Form "C" declaration, the writ petitioners therein shall be entitled to refund and/or adjustment of the same from the concerned authorities, who collected the excess tax through oil companies or otherwise. The special leave petition filed against the said decision in SLP C No. 20572 of 2018 was dismissed by order dated 13.08.2018. The decision in the case of the writ petitioner before us in the case filed before the High Court of Jharkhand reported in 2019 SCC Online Jharkhand 1255 was approved by the Hon'ble Supreme Court in its decision dated 24.03.2021. In an appeal arising out of the order passed by the High Court of Madras in the case of the Commissioner of Commercial Taxes and Another Versus Ramco Cements Limited dated 24.03.2021, the Hon'ble Supreme Court while dismissing the special leave petition by order dated 24.03.2021 observed that nine High Courts have taken the same view and on....
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....annot be heard to take such a stand because the decision which was directed to be followed in the circular was upheld by the Hon'ble Supreme Court and has become a binding legal precedent. The delegatee cannot over step or supersede the delegator and this being an elementary principle, the State of West Bengal cannot and could not wriggled out of their obligation in following the decision and continuing to accept the Form "C" declaration submitted by the selling dealers. After the legal issue had settled down and the state of Jharkhand issued Form "C" declaration to the writ petitioners who in turn submitted the same to the IOCL, the selling dealer, who in turn have filed the same before their assessing officer when time came to consider the Form "C" declaration and extend the concessional rate of tax, a road block has been created by the appellants and the state presumably with a view to continue retaining the excess tax collected by raising certain unsustainable grounds and non-suiting IOCL and the writ petitioners on hyper technical and untenable grounds. That apart yet another hyper technical stand has been taken before us by stating that the circular dated 01.11.2018 issued by....
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....x burden. As rightly pointed out by Mr. Gulati, the appellants have not specifically denied or disputed such an averment in their affidavit in opposition. That apart in the present appeal writ petitioner has filed an affidavit of their chartered accountant affirming that the tax burden has not been passed on by the writ petitioner to their customers. Therefore, the appellant and the state cannot raise any contention in this regard nor attempt to plead the theory unjust enrichment qua the writ petitioners. 85. In India Council for Enviro-Legal Action, the concept of unjust enrichment was discussed. It was pointed out that unjust enrichment has been defined as benefit obtained from another, not intended as a gift and not legally justifiable for which the beneficiary must make restitution or recompense. Further by referring to the Black's Law Dictionary 8th Edition, (Bryan A. Garner) it was stated that the claim for unjust enrichment arises where there has been an unjust retention of a benefit to the loss of another or the retention of money or property of another against the fundamental principles of justice or equity and good conscience. Considering the facts of the present case, w....
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....pproached the authorities in Haryana claiming refund which came to be rejected on the ground that excess tax can be refunded only to those to whom it was charged as per the provisions of the Haryana Value Added Tax Act, 2003. Challenging the said order, the writ petition was filed. The writ petition was allowed and refund was directed to be granted to the petitioner, purchasing dealer. The operative portion of the judgment is as follows:- * It is not disputed that the Petitioner/Company has furnished proof of bearing the burden of the excess tax to the respondent authorities. The stand taken by the respondent authorities while rejecting the representation of the Petitioner/Company is that the excess tax can be refunded only to those from whom it was charged as per the Section 20(1) and (7) of HVAT Act. A similar controversy came up for consideration before this Court in the case of Capro Power Limited (supra) as also before Gujarat High Court in J.K. Cement's case (supra), wherein a number of judgments of the Hon'ble Supreme Court have been discussed. The relevant observations recorded in J.K. Cement's case (supra) read as under:- "19. In the opinion of this Court, in the light....
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....he petitioner an deposited by the seller in accordance with law within a period of four (4) weeks from the date of receipt of certified copy of this judgment. However, it is made clear that once the refund claim of the petitioner is processed, Indian Oil Corporation would not be entitled to claim any such refund. 86. The Learned Advocate General referred to the decision in Tata Iron and Steel Company Limited for the proposition that the liability to pay tax is on the seller, consequently, the question of seeking for refund of tax by the writ petitioner, purchasing dealer does not arise. Referring to paragraph 17 of the said decision, wherein the argument that the sales tax is an indirect tax on the consumer; the idea is that the seller will passes it on to the purchaser and collect it from them. The seller collects the sales tax from the purchaser on the occasion of the sale and once the time passes, the seller loses the chance of realizing it from the purchaser and if it cannot be realized from the purchaser, it cannot be called sales tax. This argument made by the Attorney General before the Hon'ble Supreme Court was rejected and it was held that under the Bihar Sales Tax Act, 1....
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....ns which was referred to by the learned Advocate General more particularly the decision in George Oakes and Central Wines could be applied to the facts and circumstances of the case on hand. George Oakes (Private) Limited where dealers in motor cars, spare parts and accessories, for the years 1951-1952 and 1952-1953, they submitted their return and claimed exemption from tax with regard to the certain amount realized on transactions of sales which the appellant therein contended as interstate sales and hence exempt from tax under Article 286 of the Constitution as it stood at the relevant time. The assessing officer not only rejected the claim for exemption but added to the turn over certain amounts which the appellant had collected by way of tax. Aggrieved by such order, appeals were preferred before the First Appellate Authority which was dismissed and the matter was taken to the Sales Tax Appellate Tribunal. By the said time, the Madras Legislature had passed The Madras General Sales (Definition of Turnover and Validation of Assessments) Act, 1954. The Constitutional validity of the said Act was also put to challenge. The tribunal negatived the claim of the appellant therein ari....
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....ssion "any other sum charged by the dealer whatever be the description, paid or object thereon" occurring in Section 2(s) of the Andhra Pradesh General Sales Tax Act, 1957. While examining the provisions of the said Act, it was held that the dealer under the said Act who sells the goods does not act as agent of the state in collecting sales tax from the person to whom he sells the goods because the act does not cast any obligation on the purchaser of the goods to pay any tax and therefore what is collected by the vendor from the vendee by way of consideration for passing the property in the goods to the vendee is the sale price charged by whom and not taxed collected by whom from the purchaser. As rightly pointed out by Mr. Gulati in none of these decisions, the provisions of the Central Sales Tax Act was subject matter of consideration; the scheme of taxation under the CST Act is unique and the decisions referred by the learned Advocate General which were interpreting the state Acts could have no application to the case on hand. Notably Section 9 of the CST Act makes the position amply clear. Section 9 deals with levy and collection of tax and penalties. Sub section 1 of Section 9....
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.... to the facts of the case. The above aspect is further clear from a reading of Section 9A of the Act which deals with the collection of tax to be only by registered dealers. It states that no person who is not a registered dealer shall collect in respect of any sale by him of goods in the course of Inter-State Trade and Commerce any amount by way of tax under the CST Act and no registered dealer shall make any such collection except in accordance with the Act and the Rules made thereunder. If the dealer violates the said provision penalty is imposed under Section 10(f) of the Act. The purchasing dealer also is liable for penalty if there is violation as spelt out to Clauses (a) and (b) of Section 10 of the Act. Therefore, the scheme of the Act clearly shows that the tax burden is being passed on by the selling dealer to the purchasing dealer and if that be the scheme then it goes without saying that the selling dealer is an agent of the State for collection of tax. The Hon'ble Supreme Court in Anand Swarup Mahesh Kumar held that where a dealer is authorized by law to pass on any tax payable by him on the transaction of sale to the purchaser, such tax does not form part of the consi....
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....chment serves only private interest. Unjust enrichment of private persons is to be avoided. Enrichment of the State, even if unjust, is preferred to unjust enrichment of private persons so long as the person who has paid the money does not claim or demand it. Once the person from whom tax has been actually collected comes forward, demands within prescribed time and proves that he/it has paid the tax found to be not payable, State is under an obligation to refund or adjust, as the case may be. 11. Although Section 37 is not strictly applicable those buyers from whom tax has been collected but have been ultimately found to be exempted from paying tax cannot be left without remedy. State cannot retain money not legally payable by a person as same will amount to realization of tax without authority of law and State is under an obligation to refund/ return such money to the person who has actually paid the amount if such person demands refund. So long as the realized tax does not become unlawful realization and refundable no occasion to apply for refund arises. In case of buyers who had to pay tax to the seller as they could not submit the declaration forms or did not get the eligibil....
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.... customers from whom such tax has been realized but who, because of subsequent developments, ceased to be liable to pay such tax, including their registration numbers, amounts realized from them and to produce documents in support of the statement. (iii) In cases where the assessee has realized the tax amount from buyers/ purchasers the assessing authority will mention in the assessment order the names of such buyers/ purchasers who are entitled to get actual refund if necessary particulars are made available. (iv) The assessing authority will direct the assessee to communicate the said order to the buyers/ customers found to be entitled to get refund. (v) Whatever possible, the assessing authority will also communicate such assessment order to the buyers/ customers found to be entitled to get refund. (vi) If the assessee can satisfy the assessing authority that he has already paid back the amount realized from the buyers/ customers, the assessing authority will record such finding and refund to or adjust such excess amount in favour of the assessee. (vii) If the assessee has issued credit notes in favour of any buyer/ customer from whom taxes has been realized and such b....
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....lected would form part of the sale price or the turnover. The matter was elaborate considered by the Andhra Pradesh High Court. After reviewing many a cases on the topic, both foreign as well as Indian, both of Supreme Court and other High Courts, the said Andhra Pradesh High Court observed as below:- "What is deductible from these decisions and in fact uniformly laid down is that the burden of paying sales tax is on the "dealer". If any tax is levied by a particular enactment on the purchaser and if such tax is collected by the dealer at the time of sale specifically showing that he has paid it as tax, then the dealer, in such a case, collects it not as a part of the price for the sale of the goods but collects it as tax as an agent of the Government. In such an event, the tax so collected, not being the consideration for the sale of goods, is not includible in the turnover, much less is it includible in the taxable turnover. Also in a case where a particular enactment expressly authorizes the dealer to pass on the tax to the purchaser and in fact it is passed on at the time of sale to the purchaser, the amount of tax so collected by the dealer cannot be treated as part of the ....
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....n tax. As a result, rule 11(2) was omitted by Notification No. G.S.R. 1362, dated 9th June, 1969. 92. The above exposition clearly supports the argument of Mr. Gulati. The decision in Giridharlal Parasmal referred to by Mr. Khan in no uncertain terms holds that the duty of the assessing officer is not merely to impose tax that is lawfully exigible but also to give to the assessees the benefit of any reduction or exemption that may become due to them upon facts actually found to be true by the assessing authorities, whether or not the assesses out of ignorance or by mistake make a claim thereto. Further when the mistake is so obvious and the matter is taken on appeal, it is the duty of the appellate authority to correct the mistakes. 93. It is matter of regret to note that in respect of the period 2018-19 the assessing officer by order dated 29.06.2021 rejected the Form "C" declarations on the similar grounds as done for the previous period, the appeal filed by the IOCL was dismissed on the ground that this appeal is pending before this Court. To say the least the approach of the appellate authority in rejecting the appeal by order dated 24.03.2022 is perverse. The appellate autho....
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....tained elsewhere in this Act, deposit the amount collected by way of tax or the amount collected by way of tax in excess of the amount payable under this Act, as the case may be, into a Government Treasury or the Reserve Bank of India within thirty days from the date of such collection and intimate the Commissioner of such deposit along with a receipt from such Treasury or Bank showing payment of such amount. (3) The Commissioner shall, on application made by the buyer in respect of sales of goods to him referred to in sub-section (1) and on such terms and conditions as he may deem fit and proper, refund to such buyer the tax or the excess tax, as the case may be, collected from such buyer and deposited by the dealer in the manner referred to in sub-section (2): Provided.......... 95. Sub-Section (1) of Section 37 recognizes two categories of dealers the first of which are the dealers who are not liable to pay tax and the second category are dealers who are liable to pay tax. The first category shall not collect tax in respect of any sale of goods by him under the provision of the Act and in the second category, the collection should be in accordance with the provisions of the....
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....n'ble Supreme Court was examining the Bombay Sales Tax Act, 1959 and in particular, Section 46 of the said Act which we find to be in para materia with Section 37(1) of the WBST Act, as also Section 46 of the said Act is para materia with Section 37(2) of the WBST Act, held as follows: In a developing country, with the mass of the people illiterate and below the poverty line and most of the commodities concerned constitute their daily requirements, we see sufficient nexus between the power to tax and the incidental power to protect purchasers from being subjected to an unlawful burden. Social justice clauses, integrally connected with the taxing provisions, cannot be viewed as a mere device or wanting in incidentality. Nor are we impressed with the contention turning on the dealer being an agent (or not) of the State vis a vis swales-tax; and why should the State suspect when it obligates itself to return the moneys to the purchasers? We do not think it is more feasible for ordinary buyers to recover from the common run of dealers small sums than from Government. We expect a sensitive government not to bluff but to hand back. So, we largely disagree with Ashoka while we generally....
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....ell, it is only the selling dealer who has paid excess tax is entitled for refund. Reliance was placed on the decision in Saraf Trading Corporation and submitted that the Hon'ble Supreme Court has held that only a person entitled under law to claim the refund can do so. It is submitted that in the said case the Hon'ble Supreme Court was considering Section 44 of the Kerala General Sales Tax Act, 1963 which is similar to Section 60 of the WBST Act and it was held that the purchasing dealer would have no right to claim a refund when the statute allows the refund to be made only to the selling dealer and that the court will not take a proactive stand and grant refund to a purchasing dealer de hors the provision of the statute, even though the burden of tax may have been passed on by the selling dealer to the purchasing dealer. Further it is submitted that the learned Single Bench had referred to the decision of the Hon'ble Supreme Court in Indian Explosive Limited Versus Commissioner, Sales Tax U.P and Others (1978) 41 STC 315 to hold that the writ petitioner has locus standi.It is submitted that the said conclusion is incorrect as in the said case the court did not consider the effec....
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....f the provision for refund as contained in Section 44 of the Kerala General Sales Tax Act. We find that the Hon'ble Supreme Court had no occasion to examine Section 46A of the Kerala General Sales Tax Act. Therefore, the said contention cannot be pressed into service by the state. Interestingly, in Corporation Bank, Section 44 of the Kerala General Sales Tax Act was considered and the Court directed refund of the excess tax collected to the purchaser. The decision in Corporation Bank was rendered on 19.11.2008 which decision was not placed for consideration before the Hon'ble Supreme Court in Saraf Trading Corporation which was decided on 13.01.2011.In any event the factual position in the case on hand is of paramount consideration. The litigation which commenced in the State of Jharkhand and the circular issued by the said State was challenged before the High Court of Jharkhand and the circular was quashed and the said decision had attained finality. The selling dealer, IOCL filed review application which was dismissed. Thereafter, Form "C" declarations have been issued. The said Form "C" declarations were submitted by the writ petitioner to IOCL who in turn have filed the same be....
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....view the observations made by the learned Single Bench recording the concession stated to have been made by the learned Government Pleader becomes superfluous, be eschewed and accordingly stand eschewed in its entirety. 99. Learned Advocate General contended that the decision in Ramco is of no application to the case on hand. It is his submission that there was no question of law decided by the Hon'ble Supreme Court and the order is simple dismissal of the special leave petition arising from an order passed by the High Court of Madras. It is submitted that at the highest decision in Ramco can be said to approve issuance of Form "C' declarations which were prevented by reason of the circulars of the Government and the decision cannot be said to be law decided for the case involving refusal of refund to the buyer. Equally the decisions of the High Courts at Punjab and Haryana, Rajasthan and Jharkhand which have been noted in the orders passed by the Hon'ble Supreme Court in Ramco also pertain only to issuance of Form "C' declaration and not regarding the issue of whom would be entitled to a refund under the CST Act. Further it is submitted that the decision of the Gujarat High Court....
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....ll the States and Union Territory to follow the view taken by the Punjab and Haryana High Court in Capro Power Limited. With these reasons the special leave petitions were dismissed. Therefore, it would be incorrect to state that the special leave petition was a simple dismissal. The reasons assigned by the Hon'ble Supreme Court will clearly show that the law on the subject has been fully settled. It would not be permissible for the State of West Bengal to contend that the decisions which was referred to in Ramco and the decision in Ramco cannot apply to the facts and circumstances of the case on hand because those decisions related only to the validity of the circular refusing to issue Form "C' declaration and those decisions did not consider as to who would be the entitled to maintain an application for refund of excess tax. In our opinion, this would be as incorrect way of interpreting the decision which has laid down the legal principle. The core issue itself was as to the entitlement for Form "C" declaration. The said issue having been settled and conclusively held that Form "C" declarations have to be issue and the same having been issued and found to be in order the plea rai....
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....n agent of the Central Government to collect the correct rate of tax in accordance with the provisions of the CST Act. It is not disputed by the State of West Bengal that the conditions prescribed for claiming lower rate of tax have not been fulfilled by the writ petitioner. In such circumstances, the right to be assessed at lower rate of tax becomes a vested right and such vested right accrues in favour of the writ petitioner who has borne the burden of tax. Furthermore, the concept of unjust enrichment was dealt with by the High Court of Gujarat in J.K. Cements Limited wherein the stand taken by the State of Gujarat, similar to the stand taken before us by the State of West Bengal was repelled by pointing out that the selling dealer (Reliance Industries in the said case) cannot make an application for refund in as much as the such claim would be barred by the principles of unjust enrichment, and it was held that if the refund claim of the selling dealer is processed during the course of assessment, it may take years together and in the mean time, the purchasing dealer would be deprived of such amount and moreover while processing the refund claim during the course of assessment o....
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....us of the fact that there has been long drawn litigation and the period in dispute is from 01.07.2017 to October 2018. There is no dispute for the period prior to 01.07.2017 or post October 2018. Therefore, this Court while exercising jurisdiction under Article 226 of the Constitution is empowered to grant such relief which will ensure finality, considering the facts and circumstances of the dispute before it. The Hon'ble Supreme Court in M Sudakar Versus V Manoharan and Others (2011) 1 SCC 484 held that the power to mould relief is always available to the court possessed with the power to issue prerogative writs. It was further held that in order to do complete justice, it can mould the relief, depending upon the facts and circumstances of the case. Further it was held that in the facts of the given case, the writ petitioner may not be entitled to the specific relief claimed by him but this itself will not preclude the writ court to grant such other relief which he is otherwise entitled. In the instant case, the order of assessment passed in the case of IOCL has been challenged by the writ petitioner, in so far as it denies the benefit of concessional rate of tax by not accepting ....
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....re not convinced to grant interest for the anterior period, i.e. the period commencing from the date of payment of the tax in full. This is so because the issue as to whether Form "C" declaration should be issued or not was subject matter of legal interpretation and attained finality only after the decision of the High Court of Jharkhand. Pursuant to the direction issued by the said court Form "C" declarations were issued by the authority of the State of Jharkhand which were in turn submitted by the writ petitioner to IOCL which were filed before the assessing officer during the course of assessment proceedings. Therefore, it would not be appropriate to grant interest for the period prior to which the assessing officer of IOCL rejected the Form "C" declaration as the legal position was uncertain during the anterior period and stood settled only after the decision of the High Court of Jharkhand. Therefore, the writ petitioner would be entitled to grant of statutory interest as per the WBST Act, from the date on which the form "C" declaration were rejected by the assessing officer of IOCL. 106. In the result, the appeal is dismissed and the issues which were raised are answered in t....