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1968 Supreme(Cal) 163
HIGH COURT OF CALCUTTA
A. K. Sinha
SHIVRAM BARI GADRE - Appellant
Versus
THE COMMERCIAL TAX OFFICER OF COLLOTOLA CHARGE - Respondent
C. R. 1083 (W) Of 1964
Decided On : JULY 24, 1968
AJIT BAKSHI, K.Banerjee, NIRMAL CHAKRAVARTY, NONI COOMAR CHAKRABORTY, SAMAR DUTT
The Assistant Commissioner has a duty to record an order in writing within 30 days upon the application for refund as required under Rule 62 of the Rules. The Commercial Tax Officer has the power to review the assessment of his own motion, but the grounds for such review must be valid and the proceedings must be bona fide.
Headnote:
SALES TAX - REFUND - EXCESS AMOUNT - APPLICATION FOR REFUND - DUTY OF ASSISTANT COMMISSIONER TO RECORD ORDER IN WRITING WITHIN 30 DAYS - REVIEW OF ASSESSMENT - POWER OF COMMERCIAL TAX OFFICER - SUO MOTU REVIEW - VALIDITY.
Fact of the Case:
The petitioners, a partnership firm, paid excess sales tax for two accounting years and applied for a refund. The Assistant Commissioner of Commercial Taxes failed to pass orders for refund within 30 days as required by the rules. The petitioners also challenged two notices issued by the Commercial Tax Officer for review of the assessments on the ground that the grounds given were not valid and the proceedings were mala fide.
Finding of the Court:
The Court held that the Assistant Commissioner had a duty to record an order in writing within 30 days upon the application for refund as required under Rule 62 of the Rules and that his failure to do so made him amenable to the writ jurisdiction of the Court. The Court also held that the Commercial Tax Officer had the power to review the assessment of his own motion, but that the grounds given in the notices for such review were not sufficient and the proceedings adopted were mala fide. However, the Court declined to quash the review proceedings, holding that the objections raised by the petitioners could be pressed before the Commercial Tax Officer.
Issues: 1. Whether the Assistant Commissioner had a duty to record an order in writing within 30 days upon the application for refund as required under Rule 62 of the Rules? 2. Whether the Commercial Tax Officer had the power to review the assessment of his own motion? 3. Whether the grounds given in the notices for such review were sufficient and the proceedings adopted were mala fide?
Ratio Decidendi: 1. The Court held that the Assistant Commissioner had a duty to record an order in writing within 30 days upon the application for refund as required under Rule 62 of the Rules. The Court reasoned that the Assistant Commissioner's only consideration in dealing with the application for refund was whether the conditions specified in Section 12 of the Bengal Act had been fulfilled along with the matters provided in Rules 59 and 61. All other considerations were irrelevant. 2. The Court held that the Commercial Tax Officer had the power to review the assessment of his own motion. The Court reasoned that there was nothing in the Act or the Rules to show that such a power did not exist. 3. The Court held that the grounds given in the notices for such review were not sufficient and the proceedings adopted were mala fide. However, the Court declined to quash the review proceedings, holding that the objections raised by the petitioners could be pressed before the Commercial Tax Officer.
Final Decision: The Court quashed the decision of the respondents not to refund the excess amounts of tax to the petitioner on the ground of pendency of review and directed respondent No. 2 to record appropriate orders in writing upon the applications of the petitioners for refund of the said amounts in accordance with law. The Court also discharged the other petitions challenging the review proceedings, subject to the observations made in the judgment.
( 1 ) THESE four rules are taken up together for the sake of convenience. In the first two rules the petitioners pray for refund of certain amounts lying as excess amounts with the Commercial Tax Officer in respect of assessments of two different periods and the latter two rules are directed against certain notices issued by the Commercial Tax Officer for review of the assessments in respect of those periods.
( 2 ) THE facts in these rules are inter-connected and may be briefly stated as follows :
( 3 ) THE petitioners carry on business in co-partnership under the name and style of Messrs Harry and Co. at 54, Ezra Street, Calcutta. This firm is a registered dealer and holds a registration certificate No. 301 A (CL) under the provisions of the Central Sales Tax Act, 1956, read with the Bengal Finance (Sales Tax) Act, 1941, and rules framed thereunder (hereinafter referred to as the Central Act, the Bengal Act and the Rules respectively ). The petitioners paid in advance Rs. 8,274. 37 np. along with the returns submitted for the quarters ending with the accounting year on 14th day of Sravan Sudi 2015 and Rs. 6,885. 99 np. for the four quarters ending with the accounting year on the 14th day of Sravan Sudi 2014 respectively on account of sales tax along with the returns. After deducting the amounts assessed by the Commercial Tax Officer for these two years, the petitioners were entitled to a refund of Rs. 6,758. 20 np. and Rs. 6,259. 88 np. for these two accounting years. The petitioners submitted refund applications before respondent No. 1 in accordance with the provisions of the Bengal Act but respondent No. 2 failed within 30 days from the date of submission of such refund application or even thereafter to pass orders for refund in writing and communicate the same to respondent No. 1 for issue of refund payment order (cash) as called for by the petitioners.
( 4 ) NOT having received the amount, the petitioners again sent a letter dated 9th December, 1963, calling upon respondent No. 2 for issue of refund payment order of the above amount. But in spite of receipt of such a letter no steps were taken. The petitioner then moved this Court in writ jurisdiction and obtained two rules from this Court upon the respondents for refund of the said excess amount.
( 5 ) THEREAFTER, by two notices in Form IX dated 14th August, 1964, respondent No. 1 started separate proceedings being Cases Nos. 1/64-65 and 2/64-65 for review of the aforesaid assessment orders dated 6th August, 1963, and 4th June, 1962, inter alia, on grounds that the petitioners' partnership business in States other than West Bengal appear to be separate and independent units with different trade names and, therefore, the sales which were not taxed in the earlier assessments would be treated as interstate sales and thus charged to tax. That is how the petitioners felt aggrieved and again came up to this Court and obtained the other two rules for quashing these two proceedings.
( 6 ) UPON these facts Mr. Noni Coomar Chakraborty, the learned Advocate for the petitioners contended in the first place that admittedly the petitioners were entitled to get refund of the respective amounts mentioned from the Commercial Tax Officer and, accordingly, they duly made application within 12 months from the date of assessment of tax but the Assistant Commissioner of Commercial Taxes has wrongfully and illegally withheld the refund. Mr. Chakraborty relied on Rule 62 of the Rules and submitted that the Assistant Commissioner was bound to record his order in writing for refund and communicate it to the Commercial Tax Officer for necessary action within 30 days from the date of submission of application under Rule 61. In order to examine the correctness of this contention it is necessary to look into the several rules relating to refund of excess amount of tax paid by an assessee. s 59 to 62. R
( 7 ) BEFORE I do so I must notice that Section 12 of the Bengal Act confers upo
