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2006 DIGILAW 423 (KER)

Castall Corporation (P) Ltd v. Sales Tax Officer

2006-07-14

KURIAN JOSEPH

body2006
Judgment :- Kurian Joseph, J. Petitioner has two grievances on refund and interest; (1) refund pursuant to the modified assessment and (2) refund on the security deposit and interest thereon. It is seen that is the appellate authority in Ext.P1 order dated 21-3-1985 had passed orders regarding the modification. It is the contention of the learned Government Pleader for Taxes, placing reliance on R.44 of the K.G.S.T. Rules that the entitlement for interest is only within 90 days of receipt of authorization as provided under S.44. S.44 (1) says that "When an assessing authority finds, at the time of final assessment, that the dealer has paid tax in excess of what is due from him, it shall refund the excess to the dealer." Sub-s.(2) reads as follows: "When the assessing authority receives an order from any appellate or revisional authority to make refund of tax or penalty paid by a dealer, it shall effect the refund." Thus the contention of the Revenue is that the refund need be made only after receipt of the order and consequential passing of the revised assessment. This Court in Abraham Chacko v. Addl. Sales Tax Officer (2006 (1) KLT 186) has held non-passing of an order as contemplated under S.44 or R.43 read with R.44 shall not adversely affect the entitlement of the assessee, when interest is payable as contemplated under S.44. It is also held therein that the obligation is to pass consequential orders within 90 days. In other words, the view taken therein is that the entitlement run's from the expiry of 90 days of the appellate order. Learned Government Pleader submits that 90 days to be counted from the date of receipt of the appellate order by the assessing authority. That is only in respect of the obligation to pass the modified order. As otherwise, it will be easy always for the Revenue to contend that the appellate order has not been communicated. If the appellate order is not communicated to the party also, no blame can be put on the assessee. As far the claim for interest is concerned, it is the money of the assessee that is spending with the Revenue which has been found to be not due to the Revenue. Therefore, at least from the expiry of the 90 days period, the assessee should be entitled to get the interest in respect of the excess tax paid. As far the claim for interest is concerned, it is the money of the assessee that is spending with the Revenue which has been found to be not due to the Revenue. Therefore, at least from the expiry of the 90 days period, the assessee should be entitled to get the interest in respect of the excess tax paid. Therefore, it is declared that the petitioner shall be entitled to get interest under S.44(4) from the date of expiry of 90 days from 21.3.1985 in respect of the excess tax remitted by the petitioner. As far as the claim for refund of security deposit is concerned, it is from Ext.P3 order dated 4.11.1985 that the petitioner was found entitled for refund to the security deposit of Rs.18,080/-. Though it is contended that the petitioner made several claims, Ext.P4(2) is the requested produced in the Writ Petition, that is dated 16.6.1998. The Revenue cannot have an unjust enrichment on the deposit of the petitioner, after it has been found that the assessee is entitled for refund of the same. Therefore, it is only in the interest of justice that the petitioner is granted interest at the rate of 10% provided under S.44(4) at least with effect from 16.6.1998 in respect of the amount of Rs.18,080/-. The amount as above shall be disbursed within three months from the date of production of a copy of the judgment. The Writ Petition is disposed of as above.