M/S Chambal Fertilisers And Chemicals LTD. vs. Commercial Taxes Officer

Held

The Court allowed the Sales Tax Revision/Reference in favour of the assessee. It held that Article 265 of the Constitution of India precludes the State from levying tax without authority of law. The Court reiterated that refund provisions are under Section 53(4) of the RVAT Act. It noted that the Deputy Commissioner (Appeals) itself, in a prior order for Assessment Year 2010-2011, had determined the due date as April 1, 2011, a finding not challenged by the Revenue. Applying this logic, the due date for Assessment Year 2011-2012 (March 31, 2012) would be April 1, 2012. Considering Section 53(4) and the prevalent amendment effective April 15, 2011, which included a 30-day period for granting refund interest, the due date for interest calculation became May 1, 2012. Therefore, the Revenue was bound to grant interest on the refund from May 1, 2012, until payment. The Court also held that the Circular dated April 16, 2013, relied upon by the Appellate Authority, had no legal sanction as it lacked statutory authority. The question of law was answered in favour of the assessee.

Facts

M/s Chambal Fertilisers and Chemicals Ltd. (the petitioner) filed VAT Quarterly Returns for Assessment Years 2011-2012 and 2013-2014. An assessment order dated January 17, 2014, determined a net refundable amount of Rs. 4,83,42,455/- for 2011-2012. The respondent issued an advice of refund of Rs. 4.55 crores on January 30, 2015, but without interest. The petitioner requested interest as per Section 53(4) of the RVAT Act. An interest assessment order dated September 7, 2015, granted interest of Rs. 54,57,409/- for 2011-2012, but only for the period May 1, 2013, to April 30, 2015, at 6%. The petitioner's appeal to the Appellate Authority and subsequent appeal to the Tax Board were rejected, leading to the present Sales Tax Revisions/References.

Key Issues

1. Whether the learned Tax Board was justified in not considering the amendment brought under the provisions of Section 53(4) of the RVAT Act w.e.f. 31.07.2014 in the right perspective, thereby depriving the petitioner of its right to interest on the refund due to it? Petitioner's arguments: The petitioner contended that the assessing and appellate authorities misinterpreted Section 17 of the RVAT Act, which deals with net tax payable, instead of Section 53(4) of the RVAT Act, which specifically pertains to refunds. They argued that Section 53(4) should have been applied to calculate the interest due on the refund. The petitioner sought to quash the impugned order and have the due date calculated according to Section 53(4) of the RVAT Act. Respondents' arguments: The Revenue argued that the Tax Board correctly decided the issue of the due date for computation of interest in their favour. They asserted that there was no legal infirmity in the Tax Board's order and that the Court, exercising revisionary powers, cannot delve into disputed questions of fact. The Revenue relied on Section 17 of the RVAT Act, particularly Section 17(2), which states that if a dealer claims a refund at the end of the year, it shall be granted only after the end of the immediately succeeding year, unless the Commissioner directs otherwise.