Orissa High Court
Afr vs Deputy Commissioner Of on 19 April, 2023
ORISSA HIGH COURT: CUTTACK
W.P(C) NO. 21008 OF 2022
In the matter of an application under Articles 226 and
227 of the Constitution of India.
---------------
AFR
M/s. OMJAY EV LIMITED,
Bhubaneswar ..... Petitioner
-Versus-
Deputy Commissioner of
State Tax, CT & GST Circle,
Bhubaneswar & Ors. ..... Opp. Parties
For Petitioner : M/s. B.P. Mohanty, N. Paikray,
R.P. Kar, A.N. Ray, S.P. Bhuyan
and S.A. Mohanty, Advocates
For Opp. Parties : Mr. Sunil Mishra,
Addl. Standing Counsel,
CT & GST Department
P R E S E N T:
THE HONOURABLE DR. JUSTICE B.R.SARANGI
AND
THE HONOURABLE MR JUSTICE M.S. RAMAN
Date of hearing:13.04.2023::Date of Judgment:19.04.2023
DR. B.R. SARANGI,J. The petitioner, by means of this writ
petition, seeks to quash the order dated 02.08.2022, by
which the Deputy Commissioner of State Tax, CT &
GST Circle, Bhubaneswwar-1, Bhubaneswar has
rejected the refund application of the petitioner in Form
GST-RFD-06 under Annexure-10, as well as the refund
rejection order dated 02.08.2022 for the period from
December, 2021 to January, 2022 in Annexure-11, and
further to issue direction to opposite party no.1 to grant
refund as per refund application in Form GST-RFD-01
under Annexure-2 on account of Input Tax Credit
accumulated due to Inverted Tax Structure and further
to issue direction to opposite party no.1 to pay interest
on the refundable amount.
2. The factual matrix of the case, in brief, is
that the petitioner, a holder of Goods and Services Tax
Registration Number 21AACCO7477Q1ZU under the
CGST/OGST Act, is engaged in the business of
manufacture of e-vehicles in various processes
including chassis punching, colouring, wiring etc., and
subsequent supply thereof. The petitioner procures
domestically and imports various items with different
HSN, which are integral part and parcel of
manufacturing of e- vehicles. The petitioner procures
inputs (goods) for manufacturing of e-vehicles at
various rates, such as, 5%, 12%, 18% and 28% with
separate HSN, whereas the outward supply is of the
new product, namely, "e-vehicles" with different HSN on
which GST is leviable @ 5%. As a result of such reduced
rate of the GST on outward supply of goods, i.e., e-
vehicles, the Input Tax Credit (hereinafter referred to as
"ITC") gets accumulated in the hands of the petitioner,
which is legally and statutorily termed as "Inverted
Duty Structure". Further, the petitioner also procures
and supplies spare parts chargeable to GST @18% and
28% to its channel partners (dealers), as they are
required to provide warranty of their products. As the
input and output rate of GST on spare parts are same,
no ITC gets accumulated in respect of spare parts.
Hence, the supply of spare parts is not treated as
inverted sales.
2.1 During the tax period from December 2021
to January 2022, the petitioner had filed return in
GSTR-1 in respect of details of outward supplies of
goods or services and also filed return in Form GSTR-
3B in respect of details outward supplies and inward
supplies of goods or services. In accordance with the
regular practices followed by the petitioner for the
previous tax periods, i.e., filing of periodic refund
application, it filed refund application on 02.06.2022 in
respect of accumulated unutilised ITC of the input
goods in Form GST-RFD-01 to the tune of
Rs.1,57,92,298.00 for the period December 2021 to
January 2022 and it was issued with receipt of refund
application, i.e., Refund ARN Receipts. On 22.06.2022,
the petitioner submitted all the relevant documents in
support of its refund application claiming refund of
Rs.1,57,92,298.00 for the period December 2021 to
January 2022 in strict adherence to column no.5 of
CBIC Circular No.125/44/2019-GST dated 18.11.2019
and in the manner as provided in Rule-89(5) of the
CGST Rules. Sub-section (3) of Section 54 of the
CGST/OGST Act provides that refund of any unutilised
ITC may be claimed where the credit has accumulated
on account of rate of tax on inputs being higher than
the rate of tax on output supplies. The petitioner
appeared before opposite party no.1 on 22.06.2022 and
submitted all the relevant documents. Although the
petitioner submitted all the documents and also made
compliance of column no.5 under Annexure-A and B
appended to the CBIC circular under Annexure-4, it
was called upon to show cause for rejection of
application for refund in Form-GST-RFD-08 dated
28.06.2022 in respect of refund application for the
period December, 2021 to January, 2022 by calling
upon the petitioner to submit the documents, as
prescribed in column no.5 of the Circular
No.125/44/2019-GST and the books of accounts for
the respective tax periods physically by fixing the date
to 13.07.2022.
2.2 On 06.07.2022, the petitioner appeared
before opposite party no.1 and filed Form-GST-RFD-09
in respect of refund application for the period
December, 2021 to January, 2022 along with all the
requisite/supporting documents with a show cause
reply praying therein for necessary order granting of
refund on account of ITC accumulated due to Inverted
Tax Structure. Though the petitioner submitted all the
documents in physical mode before issuance of show
cause notice in RFD-08, which were uploaded along
with Form-GST-RFD-09, it was caused appearance
along with its books of account before opposite party
no.1 on 13.07.2022. The books of account were
examined in detail and the petitioner's authorized
person explained the books of account in terms of
column no.5 of the CBIC Circular bearing No.
125/44/2019-GST in connection with Section- 54 (3)
read with Rule-89 (5) appertaining to refund on account
of inverted duty structure. On 28.07.2022, the
authorised person of the petitioner's company received
a call from opposite party no.2 for submission of soft
copies of data, which were uploaded and submitted as
per column no.5 of the CBIC circular and accordingly,
on the very same day, the petitioner submitted all the
soft copies of the data for verification of opposite party
no.2.
2.3. Then, opposite party no.2 called upon the
petitioner on 29.07.2022 through e-mail, wherein the
petitioner was asked to provide the documents within 2
days of the service of the letter in connection with
refund application submitted under Section-54(3) of
CGST/OGST Act for the period from December, 2021 to
January, 2022. In compliance thereof, the petitioner
filed its reply on 30.07.2022 to the questionnaire given
by producing the books of account before opposite party
no.2, who examined the same. By so submitting, the
petitioner prayed for allowing the refund application as
early as possible in the light of the statutory provision.
But the petitioner was issued and served with Form-
GST-RFD-06 dated 02.08.2022, whereby its refund
application dated 02.06.2022 for the period from
December, 2021 to January, 2022 was rejected by
opposite party no.1 on the ground that it had not
submitted the entire books of account. Hence, this writ
petition.
3. Mr. R.P. Kar, learned counsel appearing for
the petitioner vehemently contended that for the period
from 01.11.2021 to 30.11.2021, the refund was
partially disallowed by opposite party no.1, which was
challenged before the appellate authority, i.e, Additional
Commissioner of CT & GST (Appeal), Bhubaneswar,
who, vide order dated 01.06.2022, by considering the
documents as well as books of account, as was done in
similarly situated facts and circumstances of a case,
held that the petitioner is entitled for maximum amount
of refund as per the formula given in Rule-89(5). The
said order was submitted before opposite parties no.2 &
3, but the impugned orders under Annexures-10 & 11
have been passed by sitting over the appellate order and
the statutory provisions as well. It is further contended
that though the petitioner submitted all the relevant
documents along with Statement-1 as per Rule-89(5) of
the CGST Rules, Statement-1A under Rule-89(2)(h) of
the CGST Rules, copy of the GSTR-2B before opposite
parties no.1 & 2 showing the details of the taxable
inward supplies received from registered persons, who
have filed their statutory returns and deposited tax in
accordance with law and, accordingly, the same
appeared in the petitioner's portal as GSTR-2B and all
the invoices accompanying GSTR=2B for necessary
verification by opposite parties no.1 & 2, but the same
were not considered in proper perspective. Therefore,
the order rejecting the application of the petitioner for
refund cannot be sustained in the eye of law and,
consequentially, seeks for quashing of the orders
impugned under Annexures-10 & 11 and issuance of
direction for refund of the dues, as claimed by the
petitioner.
4. Mr. Sunil Mishra, learned Additional
Standing Counsel appearing for CT & GST Department
vehemently contended that there is availability of
alternative remedy under Section-107 of the OGST &
CGST Act. Without availing the same, the petitioner has
directly approached this Court by filing this writ
petition, which is not maintainable before this Court. To
substantiate his contention, he has relied upon
Commissioner of Income Tax v. Chhabil Das
Agarwal, (2013) 357 ITR 357 (SC) : (2014) 1 SCC 603.
It is further contended that the petitioner has failed to
render necessary assistance to the proper officer in
verification of accounts, when the NET ITC amount
reflected in RFD-01 did not match with the NET ITC
amount shown in the statement submitted by the
petitioner on 01.08.2022 for the tax period December,
2021 to January, 2022 and when the NET ITC amount
reflected in RFD-01 reflected input services not
admissible for computation of refundable amount on
account of inverted duty structure. It is further
contended that computation of refund on account of
"Inverted Duty Structure" is done on the basis of the
formula provided under Rule-89(5) of the OGST Rules.
The same having not been adhered to, the petitioner is
not entitled to get the benefit, as claimed in the
application itself. Therefore, he contended that the writ
petition should be dismissed.
5. This Court heard Mr. R.P. Kar, learned
counsel appearing for the petitioner and Mr. Sunil
Mishra, learned Additional Standing Counsel appearing
for CT & GST Department in hybrid mode and perused
the records. Pleadings have been exchanged between
the parties and with the consent of learned counsel for
the parties, the writ petition is being disposed of finally
at the stage of admission.
6. For just and proper adjudication of the case,
relevant provisions of the Act and Rules are referred
below:-
Chapter-XI of the OGST Act, 2017 deals with
refund.
"Sec.54. Refund of tax.
xxx xxx xxx
(3) Subject to the provisions of sub-section (10),
a registered person may claim refund of any
unutilised input tax credit at the end of any tax
period:
Provided that no refund of unutilised input tax
credit shall be allowed in cases other than--
(i) zero rated supplies made without payment of
tax;
(ii) where the credit has accumulated on
account of rate of tax on inputs being higher
than the rate of tax on output supplies (other
than nil rated or fully exempt supplies), except
supplies of goods or services or both as may be
notified by the Government on the
recommendations of the Council:
Provided further that no refund of unutilised
input tax credit shall be allowed in cases where
the goods exported out of India are subjected to
export duty:
Provided also that no refund of input tax
credit shall be allowed, if the supplier of goods
or services or both avails of drawback in
respect of central tax or claims refund of the
integrated tax paid on such supplies."
Section-164 of the OGST Act, 2017 deals with power of
the Government to make rules. In exercise of power, the
Odisha Goods and Services Rules, 2017 has been
framed by the State Government. Chapter-X of the said
Rules, deals with refund.
"Rule-89. Application for refund of tax, interest,
penalty, fees or any other amount:-
xxx xxx xxx
(5) In the case of refund on account of inverted
duty structure, refund of input tax credit shall
be granted as per the following formula:-
Maximum Refund Amount =
{(Turnover of inverted rated supply of
goods and services) x Net ITC÷
Adjusted Total Turnover} - tax payable
on such inverted rated supply of goods
and services.
Explanation:-For the purposes of this sub-rule,
the expressions - (a) ―Net ITC‖ shall mean
input tax credit availed on inputs during the
relevant period other than the input tax credit
availed for which refund is claimed under sub-
rules (4A) or (4B) or both; and [―Adjusted Total
turnover‖ and ―relevant period‖ shall have the
same meaning as assigned to them in sub-rule
(4)."
7. To give effect to the provisions of the Act and
Rules, the Government of India, Ministry of Finance,
Department of Revenue, Central Board of Indirect Taxes
and Customs GST Policy Wing issued circular
No.125/44/2019-GST on 18.11.2019. Clause-3 thereof
reads as follows:
"3. With effect from 26.09.2019, the
applications for the following types of refunds
shall be filed in FORM GST RFD 01 on the
common portal and the same shall be
processed electronically:
a. Refund of unutilized input tax credit (ITC) on
account of exports without payment of tax;
b. Refund of tax paid on export of services with
payment of tax;
c. Refund of unutilized ITC on account of
supplies made to SEZ Unit/SEZ Developer
without payment of tax;
d. Refund of tax paid on supplies made to SEZ
Unit/SEZ Developer with payment of tax;
e. Refund of unutilized ITC on account of
accumulation due to inverted tax structure;
f. Refund to supplier of tax paid on deemed
export supplies;
g. Refund to recipient of tax paid on deemed
export supplies;
h. Refund of excess balance in the electronic
cash ledger;
i. Refund of excess payment of tax;
J. Refund of tax paid on intra-State supply
which is subsequently held to be inter-State
supply and vice versa;
k. Refund on account of
assessment/provisional
assessment/appeal/any other order;
l. Refund on account of "any other" ground or
reason."
Clause-13 deals with provisional refund,
which reads as follows:
"13. Doubts get raised as to whether
provisional refund would be given even in those
cases where the proper officer prima-facie has
sufficient reasons to believe that there are
irregularities in the refund application which
would result in rejection of whole or part of the
refund amount so It is clarified that in such
cases, the proper officer shall refund on a
provisional basis ninety percent of the
refundable amount of the claim (amount of
refund claim less the inadmissible portion of
refund so found) in accordance with the
provisions of rule 91 of the CGST Rules. Final
sanction of refund shall be made in accordance
with the provisions of rule 92 of the CGST
Rules."
A clarification was made on calculation of refund
amount for claims of refund of accumulated ITC on
account of inverted tax structure under clauses-53 &
54, which read as follows:
"53. Sub-section (3) of section 54 of the CGST
Act provides that refund of any unutilized ITC
may be claimed where the credit has
accumulated on account of rate of tax on inputs
being higher than the rate of tax on output
supplies (other than nil rated or fully exempt
supplies). Further, subsection (59) of section 2
of the CGST Act defines inputs as any goods
other than capital goods used or intended to be
used by a supplier in the course or furtherance
of business. Thus, inputs do not include
services or capital goods. Therefore, clearly, the
intent of the law is not to allow refund of tax
paid on input services or capital goods as part
of refund of unutilized input tax credit. It is
clarified that both the law and the related rules
clearly prevent the refund of tax paid on input
services and capital goods as part of refund of
input tax credit accumulated on account of
inverted tax structure.
54. There have been instances where while
processing the refund of unutilized ITC on
account of inverted tax structure, some of the
tax authorities denied the refund of ITC of GST
paid on those inputs which are procured at
equal or lower rate of GST than the rate of GST
on outward supply, by not including the
amount of such ITC while calculating the
maximum refund amount as specified in rule
89(5) of the CGST Rules. The matter has been
examined and the following issues are clarified:
a) Refund of unutilized ITC in case of inverted
tax structure, as provided in section 54(3) of the
CGST Act, is available where ITC remains
unutilized even after setting off of available ITC
for the payment of output tax liability. Where
there are multiple inputs attracting different
rates of tax, in the formula provided in rule
89(5) of the CGST Rules, the term "Net ITC"
covers the ITC availed on all inputs in the
relevant period, irrespective of their rate of tax.
b) The calculation of refund of accumulated ITC
on account of inverted tax structure, in cases
where several inputs are used in supplying the
final product/output, can be clearly understood
with the help of following example:
i. Suppose a manufacturing process involves
the use of an input A (attracting 5 per cent GST)
and input B (attracting 18 per cent GST) to
manufacture output Y (attracting 12 per cent
GST).
ii. The refund of accumulated ITC in the
situation at (i) above, will be available under
section 54(3) of the CGST Act read with rule
89(5) of the CGST Rules, which prescribes the
formula for the maximum refund amount
permissible in such situations.
iii. Further assume that the applicant supplies
the output Y having value of 3,000/-during the
relevant period for which the refund is being
claimed. Therefore, the turnover of inverted
rated supply of goods and services will be Rs.
3,000/-. Since the applicant has no other
outward supplies, his adjusted total turnover
will also be Rs. 3,000/-.
iv. If we assume that Input A, having value of
500/- and Input B, having value of Rs. 2,000/-,
have been purchased in the relevant period for
the manufacture of Y, then Net ITC shall be
equal to Rs. 385/- (Rs. 25/- and Rs. 360/- on
Input A and Input B respectively).
v. Therefore, multiplying Net ITC by the ratio of
turnover of inverted rated supply of goods and
services to the adjusted total turnover will give
the figure of 385/-.
vi. From this, if we deduct the tax payable on
such inverted rated supply of goods or services,
which is Rs. 360/-, we get the maximum refund
amount, as per rule 89(5) of the CGST Rules
which is 25/-."
Similarly, Annexure-A to the said circular, which deals
with list of all statements/declarations/undertakings/
certificates and other supporting documents to be
provided along with the refund application, is
reproduced hereunder:-
Sl. Type of Declaration Supporting documents to be
No. Refund /Statement/Undert additionally uploaded
aking/Certificates
to be filed online
units/deve Declaration under Self-certified copies of invoices
loper with rule 89(2)(f) entered in Annexure-A whose
payment details are not found in GSTR-2A
of tax of the relevant period
Statement 4 under Self-declaration regarding non-
rule 89(2)(f) prosecution under sub-rule (1) of
rule 91 of the CGST Rules for
availing provisional refund.
Undertaking in
relation to
sections16(2)(c) and
section 42(2)
Self-declaration
under rule 89(2) (l)
if amount claimed
does not exceed
two lakh rupees,
certification under
rule 89(2) (m)
otherwise.
5. Refund of Declaration under Copy of GSTR-2A of the relevant
ITC second and third period
unutilized proviso to section
on account 54(3)
of Declaration under Statement of invoices (Annexure-
accumulati section 54(3)(ii) B)
on due to Undertaking in Self-certified copies of invoice
inverted relation to sections entered in Annexure-B whose
tax 16(2)(c) and section details are not found in GSTR-2A
structure 42(2) of the relevant period.
Statement 1A
under rule 89(5)
Statement 1A
under rule 89(2)(h)
Self-declaration
under rule 89(2)(l) if
amount claimed
does not exceed
two lakh rupees,
certified under rule
89(2)(m) otherwise
Annexure-B to the aforesaid circular, which deals with
statement of invoices to be submitted with application
for refund of unutilized ITC, is given below in a tabular
form:
Sr. GSTI Name Invoice Details Type Cent State Inte Cess Eligible Ammo Wheth
no N of of the ral Tax/Uni grat for ITC unt of er
the Suppli Tax on ed eligible invoici
Suppli er Territor Tax ITC ng
er y Tax includi
ng in
GSTR-
2A
Y/N
Invoice Date Value Inputs/input Yes/no/P
No. Services/capital artially
goods
1 2 3 4 5 6 7 8 9 10 11 12 13 14
8. In Annexure-8, the CT & GST Officer,
Bhubaneswar-1 intimated the petitioner to furnish
details of manufacturing numbers of vehicles and
inputs used thereon during December, 2021, January
2022, February 2022. The documents, which were
required to be furnished by the petitioner, are given
below:-
"1. How many electric vehicles manufactured in
the above mentioned period.
2. How many types of electric vehicle you have
manufactured in your organization and
production of each category during the above
mentioned period.
3. Input Service and Input Goods used for the
manufacturing of one unit of electronic vehicle.
(provide the details of Inputs both goods and
services used in each category)".
9. The ground of rejection of the refund
application of the petitioner, as contained in the order
impugned under Annexure-11, reads as follows:-
"Ground of rejection:
But on verification, it is found that the output
turnover includes GST rate of 5%, 12%, 18%,
28%. It means apart from selling of electric
vehicle, the taxpayer is also engaged in the
selling of the spare parts procured from
different vendor-domestic as well as overseas,
as per documents submitted by the tax payer.
As such, in show cause notice issued in FORM-
GST-RFD-08 on dtd. 28.06.2022, the taxpayer
was to submit entire books of account for the
concerned period applied for refund. In
response to RFD-08, the taxpayer failed to
submit the entire books of account and as such,
the amount of refund to be sanctioned cannot
be determined without proper verification of
books of account. In non-compliance to
objection raised in RFD-08, the refund
application in the present case is hereby
rejected."
In view of the ground of rejection indicated in the order
impugned, it is made clear that in the show cause
notice issued in FORM-GST-RFD-08 on 28.06.2022,
though the petitioner, being the taxpayer, was asked to
submit the entire books of account for the concerned
period applied for refund, but, in response to RFD-08,
the petitioner failed to submit the same and, as such,
the amount of refund to be sanctioned could not be
determined without proper verification of books of
account. Therefore, the refund application of the
petitioner was rejected.
10. On perusal of the statutory provisions and
the circular governing the field, it is made clear that in
order to get refund as per formula given under Rule-
89(5), the petitioner has to adhere to the said
provisions. The prayer for refund has not been taken
into consideration in proper perspective while passing
the order impugned on the plea that the petitioner had
not produced the relevant documents. What the
petitioner had to submit that has already been
mentioned in the provisions of the Act and Rules and
CBIC guidelines, as mentioned above. Had the petitioner
adhered to the same, no new plea would have been
taken at this stage contending that since the petitioner
had not produced books of accounts, it is not entitled to
get refund of the amount.
11. Much reliance has been placed by the learned
Additional Standing Counsel for CT & GST Department
on paragraph-9 of the counter affidavit, wherein it has
been specifically pleaded that the petitioner had applied
for refund of accumulated unutilized ITC in RFD-01 on
dated 02.06.2022 for the period from December, 2021 to
January, 2022 and the petitioner failed to submit the
relevant documents on the date of application, i.e., on
02.06.2022, but it had submitted the documents
manually in hardcopy, as mentioned in serial no. a to q
of the said paragraph. It is contended that the petitioner
was engaged in the manufacturing of e-vehicles wherein
spare parts were used and, as such, a detailed accounts
of spare parts utilized in manufacturing and in supply
thereof was required. Therefore, the petitioner was
issued with a show-cause notice in RFD-08 on
28.06.2022 for production of books of account, i.e.,
input wise details of spare parts used during the
assembling/manufacturing process of e-vehicles in
order to ascertain the amount of inputs used during the
assembling/manufacturing of e-vehicles only and fixing
the date for personal hearing to 13.07.2022. The
petitioner replied to the show-cause notice on
06.07.2022 and submitted the documents, as
mentioned at serial no. (a) to (i) in the said paragraph,
but the petitioner failed to submit the input wise details
of spare parts used during the assembling/
manufacturing process of e-vehicles. Therefore, no
illegality or irregularity has been committed by the
authority in rejecting the refund application of the
petitioner.
12. After arguments were advanced for some time
from both sides, this Court made a query with regard to
liability of the petitioner to pay the tax to the authority
for the period it claims for refund. Mr. S. Mishra,
learned Additional Standing Counsel for CT & GST
Department, referring to the counter affidavit filed on
behalf of the opposite parties, stated that there lied a
mismatch of Rs.5,18,230/- as against reflected figure in
RFD-01 at Rs.2,22,97,228/-. Therefore, there is no
dispute before this Court with regard to the notification
issued for refund to the petitioner on the basis of
pleadings available on record. The only dispute is with
regard to Rs.5,18,230/-. The pleadings available in
paragraph-10 of the counter affidavit read as follows:
"10. That it is humbly submitted that
verification of the statement submitted by the
petitioner on dt:01.08.2022 revealed that net
ITC for the tax period December, 2021 to
January, 2022 has been reflected at
Rs.2,28,15,458/- as per the monthly model
wise vehicle manufactured and input used
thereon. But the net ITC has been calculated as
per Rule 89(5) of the OGST Rules and reflected
in RFD-01 at Rs.2,22,97,228/-. Thus, there lied
a mismatch of Rs.5,18,230/- in the net ITC
amount disclosed. On account of such
mismatch, the invoices of suppliers of the
petitioner are required to be verified. But the
petitioner failed to comply on this score. In
absence of such compliance and in the interest
of Govt. revenue the refund application of the
petitioner has been rejected by the proper
officer and the refund rejection order has been
issued in RFD-06 on dated 02.08.2022."
13. It is admitted on the part of the opposite
parties that the dispute is with regard to refund of
Rs.5,18,230/-, which requires proper adjudication by
the authority on production of documents, as claimed
by the opposite parties. Therefore, excluding
Rs.5,18,230/-, out of Rs.2,22,97,228/-, the balance
amount has to be refunded to the petitioner. If any
further amount is found to be refundable, the same can
be paid after final adjudication.
14. In Canadian Eagle Oil Co. Ltd. v. R., (1945)
2 All ER 499, quoting with approval a passage from
ROWLATT, J. the principle was expressed in the
following words: "In a taxing Act one has to look merely
at what is clearly said. There is no presumption as to
tax. Nothing is to be read in, nothing is to be implied.
One can only look fairly at the language used."
The same view has been followed by the apex
Court in Gursahai v. CIT, AIR 1963 SC 1062.
15. In St. Aubyn v. A.G., (1951) 2 All ER 473,
Lord Simonds held that "A taxing statute is to be strictly
construed, which has been well-established rule in the
familiar words of LORD WENSLEYDALE, reaffirmed by
LORD HALSBURY AND LORD SIMONDS, means: "The
subject is not to be taxed without clear words for that
purpose; and also that every Act of Parliament must be
read according to the natural construction of its words".
The said principle has been followed by the
apex Court in Member Secretary, Andhra Pradesh
State Board for Prevention and Control of Water
Pollution v. Andhra Pradesh Rayons Ltd., AIR 1989
SC 611.
16. In Potts' Executors v. IRC, (1951) 1 All ER
76, it has been held that "if there be admissible in any
statute, what is called an equitable construction,
certainly, such a construction is not admissible in a
taxing statute where you can simply adhere to the
words of the statute".
Similar view has also been taken by the apex
Court in Hansraj & Sons v. State of Jammu &
Kashmir, AIR 2002 SC 2692 and in Government of
Andhra Pradesh v. Laxmi Devi, (2008) 4 SCC 720.
17. In view of facts and law, as discussed above,
this Court directs the opposite parties to refund the
balance amount, excluding Rs.5,18,230/- from out of
total amount of Rs.2,22,97,228/-, to the petitioner
pending final adjudication of the disputed amount in
accordance with law.
18. With the above observation and direction the
writ petition stands disposed of. However, there shall be
no order as to costs.
(DR. B.R. SARANGI)
JUDGE
M.S. RAMAN, J. I agree.
(M.S. RAMAN)
JUDGE
Orissa High Court, Cuttack
The 19th April, 2023, Alok
