M/s. Gharda Chemicals Ltd. v. The State of Maharashtra and ors.

Judgment

1. Rule, By consent of the parties rule made returnable forthwith and parties are heard.

2. Ltd. This writ petition filed by M/s.Gharda Chemicals (hereinafter referred "Petitioner".) a mandamus a direction directing Commissioner Sales Tax (hereinafter referred the "Respondent") to grant interest to the petitioner under Section 44A of the Bombay Sales Tax Act, 1959.

3. follows. The brief relevant facts of the case are as a) By an assessment order dated 31.3.1997 the Asset. Commissioner Sales Tax (Adam) (M-85), Arranger granted refund RPS.79,00,000/- :2: petitioner respect period

1.4.1993

31.3.1994 This a revision Revisions authority

16.1.1998. The petitioner aggrieved revision, preferred appeal Appeal No.18/1998 before Maharashtra Sales Tax Tribunal judgment

13.6.2003, Tribunal allowed petitioner’s appeal confirmed assessment order. The Tribunal directed Assessment officer refund petitioner Section 43A Sales Tax Act. Before conceded behalf petitioner interest petitioner Section 43A Bobby Sales Tax Act incorrect provision brought a subsequent amendment in the year 1995 and would not be applicable in respect of the assessment period. b) Thereafter, on 1.7.2003 the petitioner filed an application for refund and the said refund of RPS.79,00,000/- was received on 26.2.2004. c) Thereafter, on 23.3.2004 the petitioner filed an application interest delayed refund Section 44A Bombay Sales Tax Act. By

30.9.2006, Additional Commissioner Sales Tax, Pune rejected the petitioner’s application for grant of interest on delayed refund. :3: d) On 30.10.2006 the petitioner then made representation challenged Commissioner Sales Act passed Additional Commissioner Sales Tax refusing interest delayed period. This application rejected Commissioner Sales Tax

6.7.2007 circumstances, the petitioner filed the present petition for the reliefs mentioned herein above.

4. We have perused the record. Before we deal with contentions merits, dispose behalf preliminary objection raised respondent effect petitioner’s petition dismissed petitioner equally efficacious remedy appeal Section 56 Bombay Sales Tax Act. It contended proper remedy petitioner relief sought petition before Commissioner (Appeals). Reliance placed Section 56 Bombay Sales Tax Act contended section enumerates orders appealable revisable impugned passed Commissioner Section 44A respect appeal barred Section 56 Bombay Sales Tax The Advocate petitioner placed reliance Act. judgment Tin Plate Co. India Ltd. :4: Vs. State Bihar others reported 112 Sales Tax Cases Page 543 in which the Apex Court observed as under. "It that when alternative equally efficacious remedy person, should ordinarily required a pursue remedy invoke extraordinary jurisdiction High article 226 Constitution remedy available exercise entertain discretion refuse petition". Court India a In regard, behalf petitioner contended Maharashtra Sales Tax Tribunal entertaining appeal against passed Section 44A the Act. Reliance was placed judgment Tribunal Second Appeal No.557 1995 between Kamdhenu Pesticides Vs. The State Maharashtra

15.12.2001. On perusal judgment Tribunal Rule 52A Bombay Sales Rules,1959 appeal maintainable before a Tax Tribunal. Reliance placed earlier judgment Tribunal of M/s. Elcopak Vs.The State Maharashtra ( Misc.Application Nos. 9 12 1993) decided

30.9.1994). It :5: petitioner genuine doubts maintainability appeal approached directly jurisdiction. We, therefore propose entertain petition keeping question of maintainability of an appeal open to be decided in an appropriate case.

5. On behalf of the revenue, it is contended that determined Additional Commissioner Sales Tax, Pune Commissioner Sales Tax, petitioner refund entitled interest delayed passing Assessment officer

31.3.1997, a notice revise issued

23.9.1999 ultimately petitioner Assessing officer quashed

6.1.1998. It further contended circumstances, refund favour petitioner assessment restored Tribunal

30.3.2003. After perusing concerned provisions, petitioner interest Section 44A sustainable contentions respondents regard rejected. The scheme relating Section 44A the Bombay Sales Tax Act interest delayed refund Section 44B contained Act useful to reproduce Sections 44A and 44B of the Bombay Sales :6: Tax Act, 1959. They are as under. "44A- Interest delayed refunds- (1) Where amount required refunded Commissioner person virtue issued Act refunded within ninety order, State Government person simple interest amount immediately following expiry period ninety refund. [Provided that where the amount becomes refundable by virtue of an order of the Tribunal, the interest under the provisions of this section shall be payable from the date immediately following the expiry of period of ninety days from the date of receipt of the order of the Tribunal by the officer whose order forms the subject of the appeal or revision proceedings before the Tribunal, to the date of refund.] Explanation- If granting refund within period ninety aforesaid attributable dealer, whether wholly part, period attributable :7: excluded period interest payable. (2) Where any question arises as to the period to be excluded for the purposes of calculation of interest under the provisions of this section, such question shall be determined by the Commissioner, whose decision shall be final.] 44B-Power to withhold refund in certain cases- (1) Where an order giving rise to a refund is the subject matter of an appeal or further proceeding or where any other proceeding under this Act is pending, and the authority competent to grant such refund is of the opinion that the grant of the refund is likely to adversely affect the revenue, such authority may, with the previous approval of the Commissioner, withhold the refund till such time as the Commissioner may determine. (2) Where a refund is withheld under sub section (1) the State Government shall pay interest in accordance with the provisions of the last preceding section on the amount of refund ultimately determined to be due to the person as a result of the appeal or further proceeding, :8: for the period from the date immediately following the expiry of ninety days from the date of the order referred to in sub section (1) to the date of refund."

6. On reading the aforesaid two sections harmoniously, assessee entitled interest refund prescribed rate, a within 90 refund order. Section-44B giving a refund challenged appeal further proceeding authority competent refund opinion refund likely refund Under adversely affect revenue, authority may, previous approval Commissioner, withhold refund Commissioner determine. In present case, procedure prescribed Section 44B followed. Even assuming followed, Section 44B(2), assessee become entitled refund amount appeal/further proceeding decided State Govt. statutorily interest immediately following favour expiry period 90 referred Section 44B(1) refund. From a reading merely aforesaid sections, because a revision pending, State Government entitled withhold refund :9: amount. If appeal allowed assessee become entitled interest delayed refund Section-44A, moment Tribunal Court Law revisional restored assessment order, view, Section-44B attracted present case. petitioner therefore, entitled interest The delayed refund a period

1.7.1997 actual payment i.e.

6.2.2004. During period, prescribed interest 9% p.a. hence, direct respondents simple interest rate of 9% p.a. on amount of Rs.79,00,000/- for the period from 1.7.1997 to 6.2.2004.

7. Rule is thus made absolute and the petition stands disposed off. (R.S. MOHITE, J.) (F.I. REBELLO, J.)