WP(C)/1788/2021
2023 Latest Caselaw 1731 Gua

GAHC010051142021




                   IN THE GAUHATI HIGH COURT
      (HIGH COURT OF ASSAM, NAGALAND, MIZORAM & ARUNACHAL PRADESH)


                    WRITPETITION (C) NO. 1788 OF 2021

                    Rajendra Kumar Deorah,
                    Proprietor of M/S ITAS G Pharma having its office at
                    House No. 7, 3rd Floor, Masjid Gali, Sree Nagar,
                    Guwahati, Assam-781005


                                                      ........Petitioner

                                        -Versus-

                    1. The State of Assam,
                    To be represented by the Commissioner and
                    Secretary to the Govt. of Assam, Finance (Taxation)
                    Department, Dispur, Guwahati- 6.
                    2. The Deputy Commissioner of State Taxes,
                    Kar Bhawan, Dispur, Guwahati- 781006.
                    3. The Additional Commissioner of State
                    Taxes, Assam, Kar Bhawan, Dispur-781006.
                    4. Superintendent of Taxes, Guwahati, Unit-A,
                    Kar Bhawan, Dispur-781006.

                                                      ........Respondents

Page | 1 :: BEFORE::

                   HON'BLE MR. JUSTICE SOUMITRA SAIKIA


                       For the Petitioners    : Dr. Ashok Saraf, Sr. counsel
                                               assisted by Mr. P. Baruah,
                                                Advocate

                       For the Respondents    : Mr. B. Gogoi, SC,
                                                Finance & Taxation

                      Date of Hearing         : 14.02.2023
                      Date of Judgment        : 03.05.2023

                       JUDGMENT & ORDER (CAV)

The petitioner carries on the business under the name and style of

M/S ITAS G Pharma and having its office in the Sree Nagar area of

Guwahati. It is submitted that the petitioner was a registered dealer under

the Assam VAT Act, 2003 bearing registration number 18530036665.

According to the petitioner for the assessment year 2011-12, it had

submitted its return of turnover under the Assam VAT Act, 2003 before the

assessing officer and claiming a sum of Rs. 17,29,010/- (Rupees

Seventeen Lakh Twenty Nine Thousand Ten Rupees Only) to be the

amount refundable to the petitioner. The assessing officer namely, the

respondent No 4, completed the assessment and vide the assessment

order dated 06.07.2016, a sum of Rs. 17,38,945/- (Rupees Seventeen Lakh

Thirty Eight Thousand Nine Hundred Forty Five Only) was determined as

Page | 2 the amount refundable to the petitioner. The said amount became

refundable after adjustment of input tax credit and TDS against the output

tax liability of the petitioner. It is the submission on behalf of the learned

Senior counsel for the petitioner that upon receipt of the order of

assessment, necessary steps were taken for filing of the refund application

for refund of the excess tax as determined in terms of the order of

assessment. A refund application was duly prepared and the same was

submitted in the office of respondent No. 4. However, inspite of the

application for refund having been submitted, no refund was received by

the petitioner. Upon enquiries made from the office of the respondents it

was informed that no refund application was available in their records. The

petitioner being surprised by such a response and having no other

alternative, filed another refund application before the respondent

authority amounting to Rs. 17,29,010/- (Rupees Seventeen Lakh Twenty

Nine Thousand Ten Rupees Only). The said second refund application was

submitted on 18.07.2019 which was duly received by the Office of the

assessing officer on the same date. It was submitted by the petitioner

before the authorities that any delay that may have occurred in submitting

the refund application was due to circumstances beyond the control of the

petitioner. It was prayed by the petitioner before the respondents that

Page | 3 delay, if any, should be condoned and refund payable to the petitioner for

the assessment year 2011-12 should be refunded to the petitioner.

2. That however, vide the order dated 29.08.2019, the Superintendent

of Taxes, Guwahati Unit-1 rejected the application of refund for the

petitioner on the ground that as per Section 50 of the Assam VAT Act,

2003 read with Rule 29 of the Assam VAT Rules of 2005, the refund

application was required to have been made within the period prescribed

namely 180 days from the date of assessment or re-assessment as the

case may be. Since the petitioner failed to do so the same was time

barred. It is submitted that the Superintendent of Taxes did not consider

the letter/application filed by the petitioner along with refund application

whereby reasons for delay were explained with a prayer for condonation of

such a delay, if any.

3. Being aggrieved by the order dated 29.08.2019 passed by the

Superintendent of Taxes, Unit-1, Guwahati, the petitioner filed a revision

application before the Additional Commissioner of Taxes, namely

respondent No. 3. The same also came to be dismissed vide order dated

25.02.2021 on the ground that there was no substantive evidence for the

delay in filing the refund application and the assessing officer was correct

Page | 4 in rejecting the refund application as per provisions of Assam VAT Act,

2003 read with the Rules of 2005.

4. Being aggrieved by the rejection of the refund application dated

29.08.2019 as well as the rejection of the revision petition by the Addl.

Commissioner of Taxes vide order dated 25.02.2021, the present writ

petition has been filed praying for issuance of a writ to the respondents to

direct release of the refundable amount receivable by the petitioner under

the Assam VAT Act of 2003 read with the Rules of 2005.

5. The learned Senior counsel for the petitioner has strenuously urged

that once an assessment order is passed by the authorities concerned and

any amount is refundable to the petitioner, they are entitled under the law

to make application for release of their refund as quantified by the

Department. The learned Senior counsel for the petitioner submits that the

Superintendent of Taxes dismissed the application for refund without

considering the grounds explaining the delay that had occurred in filing the

refund application The revisional authority namely, the Additional

Commissioner of Taxes, vide impugned order dated 25.02.2021 further

rejected the revision application by upholding the order of the

superintendent of Taxes saying that there is no substantive evidence for

the delay in filing the refund application. The learned Senior counsel for the

Page | 5 petitioner submits that although a time limit is prescribed under the Act

and the Rules, but power has been granted to the respondent authorities

to condone such a delay upon sufficient explanation being furnished by the

assessee.

6. The learned Senior counsel for the petitioner submits that this Court

in a similar matter had interfered with such order passed by the

departmental authorities and had remanded the matter to re-decide the

question of grant of refund. The learned Senior counsel has referred to the

Judgment dated 20.01.2021 passed in W.P(C) No. 6314/2017 in support of

his contentions. The learned Senior counsel has further referred to a

Judgment of a Division Bench of this Court being Judgment and Order

dated 20.02.2018 passed in C. Ex Appeal No. 8/2016. The learned Senior

counsel referring to the Judgment submits that a Division Bench of this

Court had categorically held that once it is found that the assessee is

entitled to refund then denial of a benefit of exemptions and refund on the

ground of delay will cause grave injustice which cannot be permitted. The

learned Senior counsel referring to the Judgment of the Division Bench

submits that this Court had upon consideration of all materials had

returned a categorical finding that once it is found that the assessee is

eligible for refund then the same cannot be withheld on the ground of

Page | 6 delay as it will cause grave injustice which cannot be permitted. Relying on

the Judgment of this Court, the learned Senior counsel submits that in the

facts of the present case, the petitioner's entitlement to refund is not

questioned as vide the assessment order dated 06.07.2016 and amount of

Rs. 17,38,945/-(Rupees Seventeen Lakh Thirty Eight Thousand Nine

Hundred Forty Five Only) was held to be refundable. Therefore, the said

amount ought to have been refunded by taking into account the

explanation furnished by the petitioner explaining the grounds of delay.

7. The learned Sr. Counsel further refers to the Judgment of the Apex

Court rendered in M/S Shiv Shankar Dal Mills and Others Vs. State

of Haryana and Ors., reported in (1980) 2 SCC 437. Pressing this

Judgment into service, the learned Senior for the petitioner counsel

submits that the powers of the constitutional Court bestowed under Article

226 are discretionary in nature and this Court can pass any order to secure

justice in terms of public interest and equity. Where a refund is payable to

the assessee, the same cannot be withheld or turned down on the negative

plea of alternative remedy and the same must be permitted on the basis of

the Maxim "ubi jus ibi remedium" and on equity. It is submitted that in

such cases, the Apex Court held therein that law of limitation is not

applicable and any such refund or amount held to be payable to be

Page | 7 assessee should be refunded. It is accordingly submitted that the

impugned orders dated 29.08.2019 and 25.02.2021 should be interfered

with, set aside and the respondent authorities be directed to forthwith

refund the amount of Rs 17,38,945/- held to be refundable vide the

assessment order dated 06.07.2016 passed by the respondent No. 4,

namely Superintendent of Taxes, Guwahati, Unit A.

8. Per contra, Mr. B Gogoi, learned Standing Counsel, Finance

(Taxation) disputes the submissions made by the learned Senior counsel

for the petitioner. It is submitted by Mr. Gogoi that although the amount

has been held to be refundable by assessment order dated 06.07.2016,

there is a statutory procedure by which the said refund are required to be

released to the concerned assessee like the petitioner. Referring Section 50

read with Rule 29 of the Assam VAT Rules, 2005, it is submitted that

refund application has to be submitted in the proper format within the time

period prescribed, the same not having been done. There is no infirmity in

the orders passed by the respondent No. 4 rejecting the application for

refund as well as the order passed by the revisional authority. The learned

Standing Counsel referring to the affidavit filed by the Department submits

that the prescribed statutory conditions not having been followed by the

petitioner, there is no infirmity in the orders which are impugned whereby

Page | 8 the prayer for refund has been rejected. It is submitted that the writ

petition merits dismissal as the said statutory provisions are not under

challenged and therefore they are binding in nature. The impugned order

passed by the respondent authorities are under the powers and procedures

laid down under the statute and therefore, there is no infirmity in the

orders passed. The learned Standing counsel submits that in view of the

fact that there is a statutory mandate in respect of the form and the

procedure to be filed by the assessee, the Judgments relied upon by the

petitioner are not applicable in the facts of the case.

9. The learned counsels for the parties have been heard. Pleading on

record have been carefully perused. The Judgments cited at the bar have

also been perused.

10. There is no dispute that vide assessment order dated 06.07.2016 and

amount of Rs. 17,38,945/- (Rupees Seventeen Lakh Thirty Eight Thousand

Nine Hundred Forty Five Only) has been held to be payable as refund to

the petitioner. There is also no dispute that the statute prescribes the

procedure which is to be followed by the department in addressing the

refunds. Section 50 of the Assam VAT Act reads as under.

Section 50. Refund- (1) Subject to other provisions of this Act and the rules made thereunder, if it is found on the assessment

Page | 9 or re-assessment, as the case may be that a dealer has paid tax, interest or penalty in excess of what is due from him, the Prescribed Authority shall, on the claim being made by the dealer in the prescribed manner and within the prescribed time, refund to such dealer the amount of tax, penalty and interest paid in excess by him;

Provided that, such refund shall be made after adjustment of the amount of tax or penalty, interest or sum forfeited or all of them due from, and payable by the dealer on the date of passing of order for such refund.

(2) * * *

Rules 26 of the Assam VAT Rules, 2005 reads as under.

Rule 29. Refund- (1)(a) The application for refund as referred to in sub-section (1) of Section 50 shall be made in Form-37 within one hundred and eighty days from the date of assessment or reassessment, as the case may be.

Provided that an application for refund made after the said period may be admitted by the Prescribed Authority, if he is satisfied that the dealer had sufficient cause for not making the application within the said period.

(b) * * *

11. It is seen that under the provisions of the Act and the Rules, there is

a procedure prescribed and time frame laid down. The assessing officer

before whom the application was filed dismissed/rejected the application

Page | 10 vide impugned order dated 29.08.2019 the same order is also extracted

below:

"GOVT OF ASSAM OFFICE OF THE ASSISTANT COMMISSIONER OF TAXES:: Guwahati Unit-A::

           No. 1693                                        Date. 29th August, 2019


           To,

                 N/S Itas G Pharma

                 M.L.N. Road Panbazar, Ghy-1

           Sub:-         Refund Application.

           Ref: -     Your refund application for the period 2011-12 & 2012-13
           dated 24/07/2019.

With reference to the above, I would like to inform you that as per

provisions of Section 50 of the Assam Value Added Tax Act, 03, read

with rule 29 of the Assam Value Added Rules, 05, the application for

refund shall have to be made within 180 days from the date of

assessment or re-assessment as the case may be. However, it is found

that you have failed to do so and as such the case is time barred. Hence

your refund petition is rejected.

(D. Mahanta) Superintendent of Taxes, Guwahati, Unit-A"

Page | 11

12. This order has held that the application has been rejected as the

same is not made within 180 days and accordingly the refund application

was dismissed.

13. The provisions of the statute read with the Rules thus give power to

the authorities to consider such application beyond limitation on such

grounds and reasons mentioned as may be applicable. However, in the

impugned order dated 29.08.2019 passed by the Superintendent of Taxes,

Guwahati, Unit-A, there is no reference to any such grounds or reasons

which are stated to have been furnished by the petitioner. It is not the

submission of the respondent Department that no such grounds as

contended by the petitioner, had been furnished before the Superintendent

of Taxes for consideration of the application which was filed beyond

limitation, explaining the circumstances under which the delay had

occurred. On the contrary the revisional authority namely, Addl.

Commissioner of State Taxes vide its impugned order dated 25.02.2021

had considered the grounds and rejected them to be not bona fide and

sufficient explanation of the delay.

14. In the opinion of this Court, where the first authority namely the

Superintendent of Taxes, Guwahati, Unit-A in his order did not refer to any

of the grounds submitted in explaining the delay that had occurred by the

Page | 12 petitioner, perhaps there was no occasion for the revisional authority to

consider the grounds and render a finding as to whether the same is

sufficient or insufficient. Such power under the Act and the Rules is not

bestowed upon the revisional authority. Rather it is the assessing authority

who is conferred with the powers to grant or reject refund applications

beyond the period prescribed upon such consideration of the grounds and

reasons mentioned.

15. In the facts and circumstances of the case, it is seen that there is no

denial by the respondent department that grounds and reasons were

furnished before the assessing authority. Rather From the impugned order

dated 25.02.2021 passed by the Revisional authority, it is seen that certain

explanations were furnished by the petitioner explaining the delay that had

occurred. As such, it is evident that the assessing authority who was

required to consider the explanations furnished explaining the delay that

had occurred in filing any application for refund did not consider such

grounds as the same is not discernable from the impugned order dated

29.08.2019 passed by the respondent No. 4. Coming to the Judgments

referred by the learned Senior counsel for the petitioner, it is seen that in

C.Ex. Appeal No. 8/2016 a Division Bench of this Court had categorically

held that refunds due to the assessee cannot be denied or rejected on the

Page | 13 ground of limitation. The Apex Court in M/S Shiv Shankar Dal Mills (Supra)

has also laid down the law succinctly that any amount which is payable

back is refund cannot be restrained by the respondent authority on the

ground of limitation. Apex Court held that limitation under such cases are

not applicable. A similar issue was earlier dealt with by this Court had vide

Judgment and Order dated 20.01.2021 passed in W.P(C) No. 6314/2017

and under similar circumstances directed the respondent authority to

reconsider the order rejecting the prayer for refund on the ground of

limitation.

16. The apex Court in N Balakrishnan Vs M. Krishnamurthy,

reported in (1998) 7 SCC 123 had considered the words "sufficient

cause". The Apex court held that the primary function of the Court is to

adjudicate the dispute between the parties and to advance substantial

justice. The time-limit fixed for approaching the Court in different situations

is not because on the expiry of such time a bad cause would transform into

a good cause. Rules or limitation are not meant to destroy the rights of

parties. They are meant to see that parties do not resort to dilatory tactics,

but seek their remedy promptly. The object of providing a legal remedy is

to repair the damage caused by reason of legal injury. The law of limitation

fixes a lifespan for such legal remedy for the redress of the legal injury so

Page | 14 suffered. The law of limitation is thus founded on public policy. It is

enshrined in the maxim interest reipublicae up sit finis litium (it is for the

general welfare that a period be put to litigation). Rules of limitation are

not meant to destroy the rights of the parties. They are meant to see that

parties do not resort to dilatory tactics but seek their remedy promptly. The

idea is that every legal remedy must be kept alive for a legislatively fixed

period time.

17. Condonation of delay is a matter of discretion of the Court. Section 5

of the Limitation Act does not say that such discretion can be exercised

only if the delay is within a certain limit. Length of delay is not matter,

acceptability of the explanation is the only criterion. Sometimes delay of

the shortest range may be uncondonable due to a want of acceptable

explanation whereas in certain other cases, delay of a very long range can

be condoned as the explanation thereof is satisfactory. In every case of

delay, there can be some lapse on the part of the litigant concerned. That

alone is not enough to turn down his plea and to shut the door against

him. If the explanation does not smack of mala fides or it is not put forth

as part of a dilatory strategy, the Court must show utmost consideration to

the suitor. But when there is reasonable ground to think that the delay was

occasioned by the party deliberately to gain time, then the Court should

Page | 15 lean against acceptance of the explanation. A Court knows that refusal to

condone delay would result in foreclosing a suitor from putting forth his

cause. There is no presumption that delay in approaching the Court is

always deliberate. The words "sufficient cause" under Section 5 of the

Limitation Act should receive a liberal construction so as to advance

substantial justice.

18. Upon consideration of the facts and circumstances of the case and

also the Judgments as discussed above, it is seen that the impugned order

dated 29.08.2019 passed by the respondent No. 4 merely rejected the

refund application without consideration of the grounds which were urged

by the respondent. The Revisional authority on the other hand considered

the grounds and held the same to be not applicable or not sufficient and

accordingly rejected the revision petition.

19. As discussed above, this Court is of the view that as per the statute it

is the assessing authority namely the Superintendent of Taxes, Guwahati,

Unit-A, respondent No. 4, who is at the first instance required to consider

the grounds furnished by the assessee and render its finding as to whether

the same are sufficient explanations for the delay that had occurred. The

said authority must also keep in mind that the refund which the petitioner

has sought for has already been determined by an adjudicatory process by

Page | 16 way of assessment order dated 06.07.2016 passed by the Superintendent

of Taxes. The Department does not deny that refund is payable to the

assessee. In view of the law laid down by the Apex Court as well as by a

Division Bench of this Court discussed above, it is held that while rejecting

applications for refund there must be a decision rendered by the authority

prescribed under the Act and the Rules as to the sufficiency of the grounds

urged pleading for condonation of delay. The authority prescribed must

also consider the right of the assessee for such refunds which are

receivable by the assessee pursuant to any adjudicatory proceedings held

by the department.

20. This court is of view that this matter should be remanded back to the

respondent No. 4 Superintendent of Taxes, Guwahati, Unit-A to re-decide

the application of refund together with the grounds urged seeking

condonation of delay as the same was not done by the Superintendent of

Taxes as is evident from the impugned order dated 29.08.2019 passed by

the Superintendent of Taxes. Accordingly, in view of the discussions above,

the matter is remanded back to the respondent No. 4, Superintendent of

Taxes to re-decide the issue by setting aside the order dated 29.08.2019

passed by the Superintendent of Taxes.

Page | 17

21. In view of the discussions above and the decision arrived at to

remand the matter for a fresh decision by the Superintendent of Taxes and

the interference with the order dated 29.08.2019 passed by the respondent

No. 4, the impugned order dated 25.02.2021 passed by the Addl.

Commissioner of Taxes, Assam and the revision petition is also interfered

with and set aside. In view of the fact that the prescription under the Act

and the Rules for consideration of the grounds urged for delay is primarily

vested on the assessing Officer namely the Superintendent of Taxes in the

present case and not the revisional authority. The impugned order dated

29.08.2019 and impugned order dated 25.02.2021 are therefore set aside

and quashed. Matter is directed above is remanded back to the respondent

No. 4 to re-decide the issue within a period of four week from the date of

receipt of certified copy of this order.

22. The writ petition is accordingly allowed and disposed of in terms of

the above.

JUDGE

Comparing Assistant

Page | 18