Denial of interest payable to the petitioner in tune with Section 44 (2) of the KGST Act, read with Rule 43 (2) of the KGST Rules is the subject matter of challenge in this writ petition.
2. The petitioner was a dealer in rubber and an assessee under the KGST Act/Rules on the rolls of the first respondent. The goods transported by the petitioner were intercepted, leading to satisfaction of security deposit of Rs. 85,800/- which was effected by the petitioner, as borne by Ext. P1 challan dated 29.09.2000. By virtue of the adjudication proceedings followed, the security deposit was converted as penalty, as borne by Ext. P2. Being aggrieved of the said order, the petitioner approached the appellate authority by filing appeal, which was allowed leading to Ext. P3 order, whereby the security deposit/penalty realised from the petitioner was ordered to be refunded. The said order is dated 25.04.2002. The case of the petitioner is that, he was made to run from pillar to post for getting the refund as discernible from paragraph 6 onwards of the writ petition. The petitioner finally submitted a representation before the first respondent/assessing authority to give effect to the order passed by the appellate authority causing refund, when the petitioner was let known as per Ext.P4 that, it was for the second respondent to effect refund, after implementation of the appellate order. This led to Ext. P5 filed before the second respondent, whereupon Ext. P6 was issued by the said respondent on 31.08.2010, whereby an amount of Rs.85,800/- was ordered to be refunded to the petitioner. Pursuant to the above proceedings, Ext. P7 order was issued by the first respondent on 02.11.2010 for causing refund of Rs. 85,800/- also marking a copy to the third respondent requesting to effect refund. Ext. P8 is the Refund Payment Order of the concerned Treasury, sent along with Ext. P9 intimation in this regard.
3. In the course of proceedings, the third respondent expressed helplessness as borne by Ext. P10, stating that it does not come within the jurisdiction of the said respondent as the proceedings were in respect of a place called Wadakkencherry, which comes under the jurisdiction of Trichur. Being aggrieved of the course and proceedings pursued by the respondent, the petitioner approached this Court by filing W.P.(C) No. 9821 of 2011. Ext. P11 order was issued by the first respondent afresh, as the previous order passed in this regard was already expired, simultaneously giving necessary instruction to cause refund. Ext. P12 is the copy of the relevant proceedings, whereby the refund was caused to be effected, which in fact was given effect to on 18.06.2011, based on which, W.P(C) No. 9821 of 2011 was disposed of, as per Ext. P13 judgment observing that the remaining question with regard to the claim for interest under Section 44 (2) of the Act read with Rule 43 (2) of the KGST Rules was to be considered and finalized as specified therein. It was accordingly that the petitioner filed Ext. P14 representation before the first respondent, which came to be rejected as per Ext. P15, which in turn is under challenge in this writ petition.
4. A counter affidavit has been filed by the first respondent contending that the petitioner herein had submitted an application for adjustment of the due amount payable to the department in respect of the assessment year 2001 - '02 and that, in the said circumstances, the Department is not liable to effect payment of any interest. It is also stated that the petitioner has sought to avail the benefit of Amnesty Scheme in respect of the said assessment year and that the claim for interest is wrong and unfounded. The version of the first respondent, as contained in Ext. P15, for rejecting the claim of interest is in the following terms :
“As the assessee had requested on 27.11.2006 to adjust this amount towards future dues, the Commercial Tax Officer, Wadakkencherry had issued orders allowing the request as per order No. 25201856/2000-01 dated 27.11.2006. As per Section 44 (1) of KGST Act when an assessing authority finds at the time of final assessment, that the dealer has paid tax in excess of what is due from him, it shall refund the excess to the dealer. As per Section 44 (4) in case refund under sub section (1) is not made within 90 days of the date of final assessment the dealer shall be entitled to claim interest at the rate of 10 % per annum due to him from the date of expiry of the said period up to the date of payment of adjustment. The dues for the subsequent years as per final assessment for 2001 - 02 completed on 24.07.2010 was settled by the assessee only in the Amnesty Scheme 02.11.2010 availing benefit of the Scheme. So also refund order of the Intelligence Officer, Squand No. 1, Malappuram was received in this office on 26.10.2010. The very same day itself the refunds was issued i.e on 20.11.2010. As the refund was made within the time limit no delay was occurred in this office and not entitled to claim interest.”
5. The learned counsel for the petitioner submits that there is absolutely no merit or bonafides in the version put forth from the part of the respondents. It is stated that the petitioner had not availed the benefit of Amnesty Scheme, as the amount due in respect of the assessment year 2001 - '02, as borne by Ext. P16 modified assessment order passed (pursuant to the order passed by the Tribunal), was only to an extent of Rs. 5250/-, which includes tax due @ 12 % (Rs. 3000/-) and interest due to an extent of Rs. 2250/-. The amount paid is shown as 'Nil' and as such, the alleged set off/adjustment of the amount from the amount payable in respect of the assessment year 2001 - '02 is nothing but a wrong statement of facts. It is also pointed out that Ext. P15 does not specifically say, as to which assessment year and what extent of the amount was set off/adjusted from the amount ordered to be refunded to the petitioner. The learned Government Pleader points out that, it is only in respect of the assessment year 2001-'02 as to be inferred from Ext. P16 and the counter affidavit.
But nothing is stated in the counter affidavit as to the contents of Ext. P16 and the total liability for the year 2001 - '02 is only Rs. 3000/- plus interest to an extent of Rs. 2250/- thus totaling Rs. 5250/-. This being the position, the version of the respondents that the amount was sought to be adjusted/set off pursuant to the request made by the petitioner in the year 2006 and hence that no interest is liable to be paid cannot be swallowed without any pinch of salt.
6. Another important aspect to be looked into is that, when the respondents contend that the amount payable to the petitioner was set off towards the amount payable to the department in respect of the year 2001 - 02, the fact remains that the entire amount of Rs.85,800/- was ordered to be refunded to the petitioner, as borne by Ext. P12 and the payment was effected on 18.06.2011. If any portion of Rs. 85,600/- was set off against the alleged dues, the entire amount of refund could not have been effected. This only leads to the fact that the amount ordered to be refunded as per Ext. P3 appellate order was actually not given effect to, till 18.06.2011, in spite of the fact that appellate order was passed as early as on 25.04.2002. This Court finds that the stand taken by the department, that the interest is not payable to the petitioner, is thoroughly wrong and misconceived. The position is answered against the Revenue and in favour of the petitioner.
7. But coming to the question, what exactly is the amount payable to the petitioner towards interest and how the petitioner has satisfied the amount payable as per Ext. P16 and whether any Amnesty benefit was actually enjoyed/entertained by the petitioner in respect of assessment orders etc are the matters to be considered, so as to fix the quantum of interest to be paid to the petitioner in terms of Section 44 (2) of the Act read with Rule 43 (2) of the KGST Rules.
8. In the said circumstances Ext. P15 order passed by the first respondent is set aside and the said respondent is directed to pass a speaking order, referring to relevant dates, assessment orders, amount payable in respect of the concerned assessment years, part payment if at all any effected, adjustment if at all any made by the petitioner in the year 2006 and such other particulars. This shall be done, after giving an opportunity of hearing to the petitioner, as expeditiously as possible, at any rate, within two months from the date of receipt of a copy of this judgment. The eligible extent of interest to be paid pursuant to the orders to be passed as above, shall be disbursed to the petitioner within one month thereafter.
The petitioner shall produce a copy of this judgment along with copy of the writ petition before the first respondent for further steps.
The Writ Petition is disposed of.
kmd Sd/-
P. R. RAMACHANDRA MENON, (JUDGE)