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2000 DIGILAW 65 (ORI)

Mahabir Rice Mill v. Sales Tax Officer

2000-02-02

P.K.MISRA, P.K.MOHANTY

body2000
JUDGMENT P.K.MOHANTY, J. — The petitioner is a registered dealer within the jurisdiction of the Sales Tax Officer, Bolangir-II Circle, Kantabanji (hereinafter referred to as “the STO”), opp. party No. 1, and was assessed to tax for the quarter ending June, 1985 by order dated 25.3.1986. A sum of Rs. 641.44 was found as the tax due from the dealer. The dealer having already paid Rs. 9,504.00 as tax, the STO found Rs. 8,863.00 as refundable to it. The petitioner filed its refund application on 5.4.1986 claiming refund of the said amount. The grievance of the petitioner is that though it approached the STO several times for refund of the amount no action was taken. 2. In response to the memo dated 29.5.1990 of the STO, opp. party No.1, the petitioner filed a representation on 4.2.1991 before the said authority stating that though necessary sanction of refund had already been accorded by the Assistant Commissioner of Sales Tax. Bolangir Range, Bolangir, the matter was pending with him (opp. party No.1). It further submitted that the refund was being delayed on untenable grounds. The petitioner prayed for issuance of refund order. Ultimately, the STO issued the sanction order along with the refund voucher on 17.3.1993. However, inter¬est for delay in grant of refund as provided under Section 14-C of the Orissa Sales Tax Act, 1947 (for short “the Act”) was not granted. Being aggrieved by the same, the petitioner has filed this writ petition. 3. The opposite parties have filed a counter affidavit refuting the claim of interest on the refundable amount of Rs. 8,863.00 on the following grounds : (i) There had been defect in the refund application which was rectified on 22.8.1989. (ii) It was necessary to ascertain the genuineness of proof of deposits into Government Treasuries located outside the jurisdic¬tion of the STO as money paid by the petitioner at other circles had been given credit on the basis of money receipts. (iii) Refund was granted after information from other circles was received with regard to the fact of payment. It was submitted on behalf of the opposite parties that the claim of refund is legitimate when the same is in order in all respects. In the present case, objection was raised by the refund scrutinising authority as well as the refund approving authority on account of payments made at different other circles and check gates. It was submitted on behalf of the opposite parties that the claim of refund is legitimate when the same is in order in all respects. In the present case, objection was raised by the refund scrutinising authority as well as the refund approving authority on account of payments made at different other circles and check gates. The refund was not made in view of the provision contained in Rule 36 of the Orissa Sales Tax Rules, 1947 (for short, “the Rules”) as the aforesaid payments had not been made in the shape of Govern¬ment Treasury deposit, postal money order, crossed cheque or bank draft. Claim of refund is also subject to further verification and scrutiny by the Sales Tax Officer (Inspection). Therefore, claim of interest for delay in disposal of refund application cannot be said to be justified. 4. It is necessary to quote the statutory provisions of Sections 14 and 14-C of the Act, which run as follows : “14. Refunds - The Commissioner shall, in the prescribed manner, refund to a dealer applying in this behalf any amount of tax (penalty or interest) paid by such dealer in excess of the amount due from him under this Act, either by cash payment or by deduction of such excess from the amount of tax, penalty or interest due thereon in respect of any other periods. Provided that no claim to refund of any tax, penalty or interest paid under this Act shall be allowed unless it is made within twenty-four months from the date on which the order of assessment or order imposing penalty, as the case may be, was passed or from the date of the final order passed on appeal, revision or reference in respect of the order earlier mentioned, whichever period is later; Provided further that no claim to refund of any tax, penalty or interest paid under this Act shall be allowed in cases where there is an order for re-assessment, until the re-assessment is finalised. 14-C. Payment of interest on refundable amount - Amounts refundable under Section 14, if not refunded within ninety days from the date of receipt of the application in that behalf from the dealer shall carry interest at the rate of eighteen per cent per annum for the first ninety days and thereafter at the rate of twenty-four per cent per annum with effect from the date of expiry of the period specified above." A reading of the provisions of the statute would make it clear that the dealer is required to make the application for refund in the prescribed form within the prescribed period and in the prescribed manner. The statute does not provide anywhere for any authority to be satisfied about grant of refund if the condi¬tions for grant of refund are satisfied. And interest is payable if refund is not allowed within ninety days from the date of receipt of the refund application of the dealer. After such date, refund shall carry interest at the rate of 18% per annum for the first ninety days, and thereafter at the rate of 24% per annum with effect from the date of expiry of the first ninety days till the date of refund. The said provision does not indicate that on any ground delay can be waived or period of granting interest can be deferred if conditions mentioned in Section 14 are satisfied. There is no dispute that a dealer who satisfied the conditions mentioned in Section 14 of the Act is entitled to interest under Section 14-C after lapse of ninety days from the date of receipt of the refund application by the Sales Tax Officer at the rate of 18% per annum for the first ninety days and at the rate of 24% per annum thereafter till the date of refund. It may be pointed out here that the STO in the assessment order has given credit to the total amount of tax paid by the petitioner at different circles after being satisfied that the said payments had in fact been made by the petitioner in relation to the period in ques¬tion. 5. The third proviso to Rule 36 reads as under : "36. 5. The third proviso to Rule 36 reads as under : "36. Payment of tax to be made before furnishing return - xxx xxx xxx Provided also that if any tax is paid to any officer-in-charge of check-post or barrier, receipt for such payment of tax issued by the officer-in-charge of check-post or barrier shall be adjusted against the admitted tax payable by a dealer before furnishing a return if a certificate to that effect is obtained from the Sales Tax Officer." Of course, Rule 36 of the Rules provides that a certificate of the Sales Tax Officer of the check gate is to be furnished in evidence of the payment of tax at the check gate, so that the said payment can be adjusted against the admitted tax during the period in which such payment is made. But,if the money receipt granted by such officer in evidence of the payment of tax at the check gate is produced and credit of such payment is given while arriving at the figure of the tax paid at the time of making assessment, it must be construed that the money receipt has been accepted to be a certificate of the concerned Sales Tax Officer. In such a situation, there is no requirement in law for further evidence in addition to the aforesaid receipt for the purpose of disposal of the refund application. 6. Now, let us consider the other ground of objection, i.e. regarding defective application. Section 14-C grants ninety days for payment of refund. As such the Sales Tax Officer has to point out the defect, if any, within the said period. In case he fails to intimate the person submitting the refund application about the defect, if any, in the application within the said period, he cannot because of his own fault, deny interest. The counter does not indicate what defect existed in the refund application and when such defect was intimated to the dealer, except making a bald statement that defect was rectified on 22.8.1989. Delay in veri¬fying the receipts or obtaining the sanction is an internal matter of the Department for which the dealer cannot be denied interest. The counter does not indicate what defect existed in the refund application and when such defect was intimated to the dealer, except making a bald statement that defect was rectified on 22.8.1989. Delay in veri¬fying the receipts or obtaining the sanction is an internal matter of the Department for which the dealer cannot be denied interest. Rule 39(2), which has been quoted in the counter in support of the submission of the opposite parties is of no as¬sistance as the enquiry provided therein has to be conducted and concluded within the period of ninety days, which has been given to the Sales Tax Officer for grant of refund. 7. The next contention made by the opposite parties is that as the petitioner has not paid tax by way of challan, bank draft, postal money order or cross cheque at different check-gates, there is no liability for grant of interest and claim of interest is totally misconceived in view of the third proviso to Rule 36. This point is an after thought of the opposite parties inasmuch as the total amount paid by the petitioner has been given credit and such payments have been adjusted at the time of assessment and the said credit given by the STO has not been revised by any higher authority. Therefore, the petitioner is entitled to inter¬est on the refund amount at the rate of 18% per annum after 90 days from 5.4.1986 for a period of ninety days and thereafter at the rate of 24 % till refund was granted to it. 8. In the result, we allow the writ petition and direct the STO, opposite party No.1, to grant interest on the refund amount at the rates mentioned in the foregoing paragraph within a period of two months from the date of communication of this order. We also award cost which we assess at Rs. 500.00 (Rupees five hun¬dred only). CH. P. K. MISRA, J. I agree. Petition allowed.