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2020 DIGILAW 131 (TRI)

Biplab Kumar Ghosh v. State of Tripura

2020-12-21

AKIL KURESHI, S.G.CHATTOPADHYAY

body2020
JUDGMENT Akil Kureshi, CJ. - This petition is filed for refund of a sum of Rs. 11,44,390/- from the respondents. 2. Brief facts are as under : The petitioner is engaged in the business of execution of work contracts. In the course of execution of various work contracts, deduction of tax at source was made from the running bills of the petitioner. The petitioner had certain disputes with respect to the demand notices issued by the department concerning the petitioner's Value Added Tax liability for the assessment years 2008-2009, 2009-2010, 2010-2011 and 2011-2012. The High Court disposed of the petitions by a judgment dated 9th October, 2013 pursuant to which the Assessing Officer passed a fresh order of assessment dated 12th February, 2014. This order was common for all the concerned assessment years. The petitioner preferred revision petitions before the revisional authority which were disposed of by a common order dated 27th November, 2014. The Assessing Officer was asked to pass a fresh order of assessment bearing in mind the observations made by the High Court. Thereupon, the Assessing Officer passed a fresh order on 16th December, 2015 making fresh assessment in case of allrelevant assessment years. His computation of tax for various assessment years was as under : COMPUTATION Assessment Year 2008-09 2009-2010 Rate of tax @4% @12.5% 4% @12.5% Turnover Returned 4535947 5248475 6722001 1393297 Turnover Determined (as discussed above) 8801140 10331773 12023730 2462691 Tax payable 352045.60 1291471.62 480949.20 307836.37 Total Tax payable 1643517.22 788785.57 Less already paid by TDS certificates 928314.00 619092.00 Less ITC allowed 602796.14 254434.31 Balance to be paid 112407.08 84740.74 (Excess) Add penalty U/S 25(4) 10000 10000 Total amount to be paid 122407.08 74740.74 (Excess) Round off 122407/- 74741/- (Excess) Assessment Year 2010-11 2011-2012 Rate of tax @4% @12.5% 5% @13.5% Turnover Returned 20710719 6347877 22475606 5121159 Turnover Determined (as discussed above) 36471530 11517326 37539199 8805492 Tax payable 1458861.20 1439665.75 1876959.95 1188741.42 Total Tax payable 2898526.95 3065701.37 Less already paid by 1831807.00 1705833.00 TDS certificates Less ITC allowed 1533293 1299255.00 Balance to be paid 466573.05 (Excess) 60613.37 Add penalty U/S 25(4) 10000 10000 Total amount to be paid 456573.05 (Excess) 70613.37 Round off 456573 (Excess) 70613/- Issue demand notices in form XV accordingly for the years 2008-09 and 2011-12. No need to issue demand notice for the years 2009-10 and 2010-11 and excess amount to be adjusted in the future returns. No need to issue demand notice for the years 2009-10 and 2010-11 and excess amount to be adjusted in the future returns. The dealer deposited Rs.400000 + 194984 + 201000 + 10112/- as pre-requisite money against the years under assessment may be adjusted in future. " 3. From the above quoted portion of the order, it can be seen that in some years there was a tax demand from the petitioner, for some he had paid excess tax which had to be returned to him. In this respect, the Assessing Officer observed that for the assessment years 2008-09 and 2011-2012 demand notices should be issued. For the assessment years 2009-2010 and 2010-2011, no demand notice is to be issued but the excess amount should be adjusted in the future returns. According to the petitioner, the excess amount along with pre-deposit made by the petitioner at the time of filing revision petitions comes to Rs. 11,44,390/-which should have been refunded. 4. The respondents have filed reply and resisted the petition. Main thrust is on the Tripura Value Added Tax Rules, 2005 ("TVAT Rules" for short) under which the procedure for refund claims has been laid down. 5. Learned counsel for the petitioner submitted that the Assessing Officer could not have adjusted the refund claims of the petitioner against future assessments. Firstly, there was no pending demand or even possibility of any demand in future since the petitioner had discontinued the business and no assessments for the subsequent years were pending. On the other hand, learned counsel Mr. A Nandi for the department opposed the petition contending that the petitioner did not file refund claim as provided in the Rules and in any case, such claim is now time barred. 6. In our opinion, the Assessing Officer committed a serious error in providing for adjustment of the excess tax against the demands for the later years. We may recall, while framing fresh assessments, the Assessing Officer found that the petitioner had paid certain excess tax in two of the four years concerned. In the other two years, where the tax was payable he raised a demand and we are told that such tax was also paid by the petitioner. We may recall, while framing fresh assessments, the Assessing Officer found that the petitioner had paid certain excess tax in two of the four years concerned. In the other two years, where the tax was payable he raised a demand and we are told that such tax was also paid by the petitioner. For the years 2009-2010 and 2010-11, therefore, where the petitioner had admittedly suffered excess tax deduction at source as compared to his tax liability and thereafter deposited further amounts by way of pre-deposit for maintaining his revision petitions, he was entitled to refund thereof. Under sub-section (1) of Section 43 of Tripura Value Added Tax Act 2004, the Commissioner would refund to a dealer the amount of tax, penalty or interest, if any, paid by such dealer in excess of the amount due from him. Section 45 provides for payment of interest if the refund is not made within the time prescribed. Sub Section (1) of Section 46 provides that where an order giving rise to refund is subject matter of an appeal or further proceeding or where any other proceeding under the Act is pending and the Commissioner is of the opinion that grant of such refund is likely to adversely affect the revenue and it may not be possible to recover the amount later, the Commissioner may withhold the refund till such time as he may determine. For exercising powers under sub-section (1) of Section 46 thus either the order giving rise to the refund had to be a subject matter of appeal or further proceeding or concerning the same assessee proceedings under the said Act should be pending and the Commissioner had to form an opinion that grant of the refund is likely to adversely affect the revenue and it may not be possible to recover the amount later on. Only then the Commissioner could have provided for withholding of the refund. In the present case, the Assessing Officer mechanically provided for adjustment of the refund against the future assessments, without specifying whether any assessments were pending and any possibility of the interest of revenue being adversely affected if the refund is granted. The said portion of the impugned order was thus wholly illegal. In the present case, the Assessing Officer mechanically provided for adjustment of the refund against the future assessments, without specifying whether any assessments were pending and any possibility of the interest of revenue being adversely affected if the refund is granted. The said portion of the impugned order was thus wholly illegal. If the petitioner is right in pointing out that there were no further assessments pending and that there was no further possibility of tax liability arising, this order would operate in depriving the petitioner of the refund in perpetuity. 7. It is true that the TVAT Rules provide for a mechanism for grant of refund. In particular, Rule 35 requires the registered dealer to file a refund application before the concerned authority in prescribed manner, sub-rule (4) of Rule 35 prescribes a time limit for making such an application for refund. However, in the present case, the Assessing Officer himself while framing fresh assessments had declared that the petitioner shall not be granted refund but the excess tax collected would be adjusted against the future assessments. Till this order was set aside, therefore, the petitioner had no occasion to file refund claim. Any such refund application filed under Rule 35 of the TVAT Rules would have been summarily dismissed. 8. In the result, the portion of the order dated 16th December, 2015 passed by the Assessing Officer providing for adjustment of the excess tax to be adjusted for future assessment is set aside. However, if by virtue of the operation of the said order for any future liability such excess tax or any part thereof is already adjusted, the question of refund at this stage will not arise. But if as stated by the counsel for the petitioner no further assessments were done, the petitioner must receive the refund without filing application for such purpose. In the result, the authority shall verify the petitioner's claim that for future years, he had no further tax liability and refund such excess tax with statutory interest which may not have been adjusted against the future liability of the petitioner. This exercise shall be completed within 3(three) months from today. Rule made absolute. Petition disposed of accordingly. Pending application(s), if any, also stands disposed of.