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2018 DIGILAW 596 (GUJ)

AMISHA OIL MILL v. STATE OF GUJARAT

2018-04-06

AKIL KURESHI, B.N.KARIA

body2018
JUDGMENT : AKIL KURESHI, J. 1. The petitioners have challenged the action of the respondent authorities refusing to refund a sum of Rs.3,59,100/- paid by the petitioners for availing the benefit of an amnesty scheme. The petitioners seek refund of such amount with interest. 2. Brief facts are as under. Petitioner no.1 is a proprietary concern. Petitioner no.2 is the proprietor of the said concern. The petitioners proprietary concern are dealing in oil and cattle feed. For the assessment year 2002-2003, the tax department had raised certain tax demands against the petitioners which the petitioners had challenged in the appeal. Pending such appeal, for the later years, the petitioners had to receive refund from the department. Somewhere in the year 2012, such refund amount was first adjusted against the petitioners' dues for the year 2002-2003 and thereafter, residue of the refund was released. 3. On 2.4.2012, the Government came up with an amnesty scheme offering settlement opportunity to range of dealers whose cases were pending at various stages, mainly making exclusion in case of tax evaders. As per this scheme, if the dealer paid the disputed tax amount, interest and penalty would be waived. Last date for availing the benefit of the scheme was 30.9.2012. An intending dealer would apply to the competent authority and pay the tax on admitted liability. If the authorities find that tax was adequately paid, offer of settlement would be accepted. Clause 13 of the scheme provided that a dealer who takes the benefit of the scheme would get no refund even if such refund arises out of the provisions of the scheme. 4. Case of the petitioners is that the concern is a small one. Unmindful of the fact that the disputed taxes for the said year 2002-2003 had already been paid through adjustments out of the refunds for the later years, petitioners applied for settlement as per the said scheme. On 25.9.2012, along with such application, the petitioner produced proof of payment of admitted tax of Rs.3,59,100/which was deposited with the Government on 20.9.2012. 5. For a long time thereafter, the authorities neither accepted nor rejected the petitioners' application for settlement. On 25.9.2012, along with such application, the petitioner produced proof of payment of admitted tax of Rs.3,59,100/which was deposited with the Government on 20.9.2012. 5. For a long time thereafter, the authorities neither accepted nor rejected the petitioners' application for settlement. According to the petitioners, they realised that the refund was adjusted for the tax demands for the assessment years 2002-2003 only when the final order of assessment was passed in the assessment year 2011-2012 on 30.3.2016 in which this factum of adjustment of refund was referred. Again under somewhat mistaken legal advise, the petitioners preferred appeal against such order of assessment. The petitioners' grievance was not with respect to assessment perse but with respect to the adjustment of the refund. The appellate authority therefore, promptly and correctly disposed of the appeal permitting the petitioners to approach the concerned authority under the amnesty scheme for redressal of the grievances. The appeal was thus disposed of on 10.3.2017. On 5.5.2017, the petitioner had applied for refund of said sum of Rs.3,59,100/erroneously deposited for availing the benefit of the scheme. The authority however rejected such a request on 22.9.2017 conveying to the petitioners that as per the terms of scheme, no refund can be paid. The petitioners' application was therefore, rejected. 6. From the record, it clearly emerges that by the time, the petitioners applied for the benefit of the amnesty scheme, the entire amount of tax with other charges was recovered by adjusting it from the petitioners' refund claims for the later years. The petitioners' application under the scheme was therefore, untenable. Under totally mistaken belief of facts, the petitioner had applied. The Government should have promptly refunded the same. When there was no occasion for the petitioners to apply for the amnesty scheme, there was no reason for the Government to hold on to the said sum of Rs. 3,59,100/deposited by the petitioners under the scheme. Clause 13 of the scheme which prohibits granting of refund arising out of the scheme therefore, would not apply in the present case. This is not a case of refund arising upon application of the terms of the scheme. This is a case where the amount was mistakenly deposited by the petitioners with the Government which the Government obviously cannot hold on to. 7. The question of refunding such amount with interest still survives. Few balancing facts may be noted. This is not a case of refund arising upon application of the terms of the scheme. This is a case where the amount was mistakenly deposited by the petitioners with the Government which the Government obviously cannot hold on to. 7. The question of refunding such amount with interest still survives. Few balancing facts may be noted. It is not as if the Government had adjusted the petitioners' refund claim against the tax liability for the assessment year 2012-2013 of which the petitioners were not unaware. In fact, there are documents on record suggesting that the petitioners agreed to such adjustments. The petitioners' application for settlement therefore, was itself based on erroneous factual premise. At the same time, the Government took no action on the petitioners' application for settlement for years together. To recall, after the petitioners applied for settlement on 25.9.2012, no action was taken on such an application till the petitioners approached the authority on 5.5.2017. Even at that stage, the Government instead of refunding the amount conveyed to the petitioners that in terms of clause 13 of the scheme, no amount can be refunded. The Government therefore, cannot be rid of the liability to pay interest for the entire period during which the amount remained with the Government. 8. Under the circumstances, the respondents are directed to refund Rs.3,59,100/to the petitioners with simple interest at the rate of 6% from the date which shall commence from six months after the date of deposit till actual payment. This shall be done latest by 15.5.2018. 9. Petition is disposed of.