The provisions of section 54(1)(aa) should be read reasonably and in a manner that grants interest on the excess amount paid as a result of an original or modified order of assessment passed in appeal.

Jayant M. Patel, J.

1. As in all the appeals, common question arises for consideration, they are being considered simultaneously. In all matters, the Revenue has preferred the appeal mainly on the following question of law:

"Whether the honourable Tribunal has erred in holding that the dealer is entitled to interest under section 54(1)(aa) on the refund arising from the appellate order?"

2. We have heard Mr. Dave, learned Additional Government Pleader appearing in all the appeals.

3. The common facts in the appeals are that the assessee has succeeded in the proceedings of the first appeal before the appellate authority and the appellate authority has ordered for refund of the tax amount. However, as the interest was not awarded on such refund of the tax amount, the assessee preferred second appeal before the Tribunal. The Tribunal, after considering the aspect of reasonable construction of the provisions of section 41 of the Gujarat Sales Tax Act (hereinafter referred to as "the Act") and after taking into consideration the principles of doctrine of merger, found that when the interest on the amount of refund of tax upon the assessment is available, such interest should be made available on the refund of the tax which has accrued on account of the order passed in appeal against the assessment orders. We may, for the ready reference, record that the Tribunal relied upon its earlier view in case of Saurashtra Chemical Ltd. v. State of Gujarat in Second Appeal No. 603 of 2007 decided on August 1, 2014 wherein, following observations were made by the Tribunal which are also the basis in all the impugned orders passed by the Tribunal. The same read as under :

"18. With regard to true nature and scope of section 54(1)(aa) of the Act, this Tribunal is of the view that the purpose of the provision is to grant interest on refund of excess money paid by the assessee. Restriction is that interest is payable where assessment proceedings are carried out under section 41 and not under section 50 or any other provision. Assessment order is the result of assessment proceedings. The refund arises in appeal instead of original stage of assessment is covered within the expression 'order of assessment under section 41'. The phrase does not give restricted meaning as 'original order of assessment under section 41' or 'order of assessment under section 41' of the first assessing officer. If the Legislature so intended it would have certainly added the word or words to give such restricted meaning. Therefore, provision must be read reasonably and full meaning must be given to the words of statute as the object is to grant interest on the excess amount paid becomes refundable as a result of an original order of assessment passed by first assessing officer or corrected/modified order of assessment passed in appeal.

19. In the opinion of this Tribunal, the assessment order passed under section 41 includes original order passed by first assessing authority as well as modified assessment order in appeal. Under an appeal the jurisdiction of the original order appealed against is exercised and therefore the order passed in appeal is corrected/modified order under the provision under which the appealed order is passed. The order passed in the appeal against original assessment order under section 41 is assessment order under section 41 and the original order of assessment merges in it. The intention of the Legislature cannot be presumed that the refund arises at the first stage of assessment is only eligible for interest and orders of assessment passed at subsequent stages resulted into refund are not entitled to interest. Appeal proceedings are continuing single proceedings of assessment. Therefore, order passed in appeal is an order of assessment under section 41. The intention is of paying interest on refund arises in order of assessment under section 41 and the modified assessment order passed in appeal is also covered under the clause (aa). The cl