CARBON RESOURCES PVT LTD v. THE STATE OF ASSAM & Ors

BEFORE HONOURABLE MR. JUSTICE ACHINTYA MALLA BUJOR BARUA

25.05.2022 ORDER Heard Dr. Ashok Saraf, learned senior counsel for the petitioner. Also heard Mr. B Gogoi, learned counsel for the respondents in the Finance and Taxation Department, Government of Assam.

#2. In the assessment order dated 01.10.2019 for the assessment year 2017- 18 under Section 36(1) of the AVAT Act, 2003 read with Rule 22(1)(x) of the AVAT Rules, 2005 in paragraphs 9 to 13 thereof the assessment authority has arrived at its conclusion that there is an entitlement for refund of the local tax paid on Intra-State purchase of declared goods subject to the condition that CST is paid on Inter-State sale of such declared goods. Paragraphs 9 to 13 of the assessment order dated 01.10.2019 are extracted below: “9. Filing of refund petition of the amount of the amount paid against sales under exemption/remission of getting the Eligibility Certificate: The dealer had deposited the tax amount @ 1% (taking benefit of remission @ 99% vide the notification No. FTX.66/2009/117 dtd. 26/12/2011) on sales made by it during the period.

#10. It is pertinent to mention that section 15(b) of the CST Act, 1956 provides for reimbursement of local tax paid on intra-State purchase of declared goods subject to the condition that CST is paid on inter-State sale of such declared goods.

#11. Filing of SLP by the State and dismissal of appeal by the Supreme Court: Being aggrieved against the judgement of the Gauhati High Court in the case of Guwahati Carbon Ltd. and Brahmaputra Carbon Ltd., Gauhati High Court in WP(C) No. 4586 of 2008 and 6646 of 2010, the State Government filed SLP before the Hon’ble Page No.# 3/6 Supreme Court [No. 12907 – 12908/2013 subsequently renumbered as 5518- 5519/2013], which was dismissed.

#12. In view of the above, clarification from the Commissioner of Taxes, Assam is sought vide this office letter No. BB/VAT/C-I/1257 dd. 13/09/2019 regarding admissibility of refund claimed under section 15(b) of the CST Act, 1956 read with section 50 of the AVAT Act, 2003.

#13. The Commissioner of Taxes, Assam vide letter No. CTS-207/2019/3 dtd. 27/09/2019 cited that the dealer is eligible to claim the refund u/s 15(b) of the CST Act, 1956 as reimbursement of local tax paid on inter-State purchased of declared goods subject to the condition that CST paid on Inter -State sales of such declared goods.”

#3. The grievance raised is that as per the provisions in paragraphs 9 to 13 of the assessment order dated 01.10.2019, the petitioner is also entitled to a reimbursement of the total tax paid on intra-State purchase of declared goods subject to the condition that CST is paid on inter-State sale of such declared goods. As there is an entitlement there is a corresponding right to make an application.

#4. Dr. Ashok Saraf, learned senior counsel for the petitioner has referred to Section 50 of the AVAT Act 2003, which inter alia provides that subject to other provisions of the Act and the Rules made thereunder, if it is found on assessment or reassessment 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 a claim being made by the dealer in the prescribed manner and within the prescribed time refund to the dealer the amount of tax, penalty and interest paid in excess by him. Section 50 of the AVAT Act 2003 is extracted as below: “50. Refund: (1) Subject to other provisions of this Act and the Rules made thereunder, if it is found on the assessment or reassessment 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 adjusting 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.” Page No.# 4/6

#5. It is further submitted that whereas on the other hand, under Section 15(b) of the CST Act, 1956 where a tax has been levied under that law in respect of the sale or purchase inside the State of any declared goods and such goods are sold in the course of inter-State trade or commerce, the tax levied under such law shall be reimbursed to the person making such sale in the course of inter-State trade or commerce in such manner and subject to such conditions as may be provided in any law in force in that State. Section 15(b) of the CST Act, 1956 is extracted as under: “Section 15(b): Where a tax has been levied under that law in respect of the sale or purchase inside the State of any declared goods and such goods are sold in the course of inter-State trade or commerce, [and tax has been paid under this Act in respect of the sale of such goods in the course of inter-State trade or commerce, the tax levied under such law] [shall be reimbursed to the person making such sale in the course of inter-State trade or commerce] in such manner and subject to such conditions as may be provided in any law in force in that State;]

#6. A reading of Section 15 (b) of the CST Act, 1956 goes to show that the reimbursement made under the said provision has to be done in such a manner subject to such condition as provided in any law in force in that State. It is stated that under the law in force in the State of Assam, no such manner has been provided as to how the amount has to be reimbursed. Page No.# 5/6

#7. In the circumstance, Dr. Ashok Saraf, learned senior counsel for the petitioner makes a submission that the petitioner may be allowed to submit an application bringing it to the notice of the authorities in the Finance and Taxation Department of the State of Assam that the petitioner is entitled to a reimbursement under Section 15(b) of the CST Act of 1956.

#8. In view of the limited grievance raised, we provide that in the event any such application is made by the petitioner, the authorities concerned shall pass a reasoned order on the claim for reimbursement purely on the merits of the claim of the petitioner within a period of two weeks from the date of such application along with a certified copy of this order and thereafter, within a period of six weeks from the date of such reasoned order to be passed, the process be brought to its logical end.

#9. To facilitate the process, a copy of the writ petition with the annexures be also furnished.

#10. We have taken note that in the meantime Section 15(b) of the CST Act of 1956 has been omitted, but the claim being for an assessment year during which the said provision was in force, it has to be understood that the provisions thereof would be applicable in respect of the claims for such assessment year.

#11. Writ petition stands disposed of in the above terms. Comparing Assistant Page No.# 6/6 JUDGE