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2025 Supreme(Raj) 1174
HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR
MR. JUSTICE AVNEESH JHINGAN, MR. JUSTICE ASHUTOSH KUMAR, JJ
M/s Richardson Cruddas (1972) Limited, Sir J.J. - Appellant
Versus
State Goods And Services Department, Government Of Rajasthan - Respondent
D.B. Civil Writ Petition No. 11523/2022
Decided On : 20-02-2025
Advocate Appeared:
For the Appellant : Mr. Ramesh Chand Agarwal with Mr. Amit Jindal Ms. Neetu Bhansali
For the Respondent: Mr. Sandeep Taneja, AAG with Mr. Kartikeya Sharma
The court found that the rejection of interest on a delayed refund was improper due to the inapplicability of cited statutory provisions, emphasizing the need for a valid withholding order.
Headnote:
(A) Rajasthan Sales Tax Act, 1994 - Section 56 and Section 57 - Rajasthan Value Added Tax Act, 2003 - Section 54 - Quashing of order rejecting interest on delayed refund - The petitioner succeeded in obtaining a refund after a Supreme Court decision, but the application for interest on the delayed refund was rejected on the grounds of pending proceedings and applicability of withholding provisions. The court found that the rejection was improper as no withholding order was issued. (Paras 1-10)
(B) Writ Jurisdiction - The court emphasized that it can interfere when a statutory provision is misapplied, as in this case where the interest claim was denied based on inapplicable sections. (Paras 10-11)
Facts of the case:
The petitioner sought interest on a delayed refund for Assessment Years 1998-99 to 2000-2001, following a successful court ruling on interstate supplies. The application for interest was rejected, leading to this petition.
Findings of Court:
The court set aside the impugned order, determining it was beyond statutory provisions, and remitted the matter for proper consideration of the interest application.
Issues: The primary issue was whether the rejection of interest on delayed refund was justified under the applicable statutory provisions.
Ratio Decidendi: The court ruled that the statutory provisions cited for withholding interest were not applicable, as no withholding order was in place, warranting judicial intervention.
Result: Writ petition allowed.
Order :
AVNEESH JHINGAN, J.
1. This petition is filed seeking quashing of order dated 10.05.2022 rejecting the application of the petitioner for grant of interest on delayed refund.
2. The brief facts are that the matter relates to Assessment Years 1998-99, 1999-2000 & 2000-2001. There was dispute with regard to interstate supplies made in works contract and the petitioner succeeded before this Court in S.B. Sales Tax Revision Petition No.179/2016 and connected matters decided on 07.07.2017. After decision of the Supreme Court, the petitioner was granted refund of the disputed amount. The application filed under Section 56 of the Rajasthan Sales Tax Act, 1994 (for short ‘the 1994 Act’) claiming interest on the delayed refund was rejected vide order dated 10.05.2022. Hence, the present petition.
3. Learned counsel for the petitioner submits that the petitioner was entitled to refund and the application was wrongly rejected. It is argued that Section 57 of the 1994 Act was not applicable.
4. Learned counsel for the respondent submits that the petitioner has remedy of appeal against the impugned order.
5. The application claiming interest on the delayed refund was rejected. Section 57 of the 1994 Act and Section 54 of the Rajasthan Value Added Tax Act, 2003 (for short ‘the Act of 2003’) were relied to deny interest to the petitioner on the ground that the proceedings were pending against the order of this court.
6. Section 57 of the 1994 Act and Section 54 of the Act of 2003 are reproduced below:-
“Section 57 of the 1994 Act:
Power to obtain security or withhold refund in certain cases-Where an order giving rise to refund is subject matter of an appeal, revision or other proceeding and such appeal, revision or other proceeding is contemplated or pending, and the officer concerned or the assessing authority for reasons to be recorded in writing is of the opinion that the grant of the refund is likely to adversely affect the State revenue, the said officer or the assessing authority may, with previous approval of the Commissioner either obtain the security equal to the amount to be refunded to the dealer or the person or withhold the refund till such time as the Commissioner may determine”.
Section 54 of the Act of 2003:
“Power to obtain security or withhold refund in certain cases.- Where an order giving rise to refund is subject matter of an appeal, revision or other proceeding and such appeal, revision or other proceeding is contemplated or pending, and the officer concerned or the assessing authority for reasons to be recorded in writing is of the opinion that the grant of the refund is likely to adversely affect the State revenue, the said officer or the assessing authority may, with previous approval of the Commissioner, either obtain the security equal to the amount to be refunded to the dealer or the person or withhold the refund till such time as the Commissioner may determine.”
7. The sections reproduced empowers department for withholding of the refund in cases where the order by which refund accrued is subject matter of appeal, revision or other proceeding and the assessing authority by recording reasons forms an opinion that grant of refund shall adversely affect the State revenue.
8. For withholding refund, three things are contemplated:-
(i) that the order giving rise to refund is subject matter of further proceedings;
(ii) assessing officer is of opinion that grant of refund is likely to adversely affect the State revenue; and
(iii) recording reasons in writing with previous approval of the Commissioner.
9. It is not the case of respondent that an order of withholding the refund was passed. The request for grant of interest on delayed refund was rejected relying upon the statutory provisions for withholding of refund, which was not applicable in absence of withholding order.
10. The impugned order is beyond the statutory provisions. The interest claim was denied relying upon a section which has no applicability and it is a fit case f
