M/S Chambal Fertilisers And Chemical LTD. Kota vs. Assistant Commissioner, Commercial Taxes Department

Held

The Court allowed the Sales Tax Revisions/References in favour of the assessee. It held that Article 265 of the Constitution of India precludes the State from levying tax without the authority of law. Provisions for refund are specifically provided under Section 53(4) of the RVAT Act. The Court noted that the Deputy Commissioner (Appeals) itself, in an earlier order for Assessment Year 2010-2011, held the due date to be 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) of the RVAT Act and the amendment effective April 15, 2011, which allowed for a 30-day period for refund, the due date for granting interest became May 1, 2012. Therefore, the Revenue was bound to grant interest on the refund from May 1, 2012, until the date of 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

The petitioner, M/s Chambal Fertilisers And Chemical Ltd., 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. A refund of Rs. 4.55 crores was advised 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, calculated 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 before the High Court.

Key Issues

1. Whether the learned Tax Board was justified in not considering the amendment brought under 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 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. - The due date for calculating interest on the refund should be determined in accordance with Section 53(4) of the RVAT Act, considering the relevant amendments. Revenue's Arguments: - The learned Tax Board correctly decided the issue regarding the computation of the due date in favour of the Revenue. - There is no legal infirmity in the order passed by the learned Tax Board. - The Court, exercising revisionary powers, cannot delve into disputed questions of fact. - Reliance was placed 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.