M/S Ganesh Steel (INDIA) vs. State Of Punjab And Others

Held

The Court held that the State Tax Officer was not justified in declining the refund solely on the basis that an appeal was being contemplated. The Court noted that over a year and four months had passed since the Appellate Authority's order dated 19.09.2022, and no appeal had been filed by the State. The Court found that the State was merely delaying the matter. The principle established is that a party cannot be deprived of the fruits of litigation for an indefinite period based on a mere intention to appeal, especially when significant time has elapsed without action. The Court quashed the order dated 28.04.2023 and directed the State to refund the amount of Rs. 8,80,992/- to the petitioner within two weeks. The Court also clarified that if any order is subsequently passed in favour of the State in further proceedings, it would not prevent the recovery of the refunded amount.

Facts

The petitioner, M/s Ganesh Steel (India), sought a refund of Rs. 8,80,992/-. This amount was originally imposed as tax, penalty, and fine under Section 130 of the Act by the Assistant Commissioner, State Tax. The petitioner's appeal to the Deputy Commissioner of State Tax (Appeal), Patiala Division, was allowed on 12.07.2022/19.09.2022. The State Tax Officer, by an order dated 28.04.2023, declined the refund, stating that the Department was in the process of filing an appeal against the Appellate Authority's order. The petitioner contended that over a year had passed since the Appellate Authority's order without any appeal being filed by the State.

Key Issues

1. Whether the State Tax Officer was justified in declining the refund of Rs. 8,80,992/- to the petitioner solely on the ground that the Department was in the process of filing an appeal against the Appellate Authority's order dated 19.09.2022, when more than one year and four months had elapsed since that order without an appeal being filed? Petitioner's Contention: The petitioner argued that the State was unduly delaying the refund despite the Appellate Authority's order in their favour and the significant time elapsed without the State filing an appeal. They contended that the State's mere intention to file an appeal should not deprive them of the fruits of litigation. Revenue's Contention: The State argued that they were in the process of filing an appeal against the Appellate Authority's order. No specific provision or precedent was cited by the State in support of their argument.