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1998 Supreme(Ori) 279
IN THE HIGH COURT OF ORISSA
P.C. Naik, A. Pasayat, JJ.
NATIONAL TRADING CO. - APPELLANT
Versus
SALES-TAX OFFICER AND OTHERS - RESPONDENT
O.J.C. Nos. 13128, 13191 and 13192 of 1998
Decided On : 09-11-1998
Saroj Kumar Das, M.K. Das, K.A. Matten and A. Mohanty, for the Appellant; J. Pradhan, A.S.C. (C.T.), for the Respondent
The Commissioner of Sales-tax must record an opinion that the grant of refund is likely to adversely affect the revenue before withholding refund under Section 14-D of the Orissa Sales-tax Act, 1947.
Headnote:
ORISSA SALES TAX ACT, 1947 - SECTION 14-D - WITHHOLDING OF REFUND - OPINION OF COMMISSIONER - NECESSITY.
Fact of the Case:
The dispute relates to non-grant of refund flowing out of the appellate order passed by the Assistant Commissioner of Sales-tax, Cuttack I Range, Cuttack for three periods, i.e., assessment years 1991-92, 1992-93 and 1993-94. Grant of refund was refused purportedly in exercise of power u/s 14-D of the Orissa Sales-tax Act. 1947 (in short, the 'Act').
Finding of the Court:
The court held that the Commissioner of Sales-tax did not record an opinion that the grant of refund was likely to adversely affect the revenue, as required by Section 14-D of the Act. The court also held that mere filing of an appeal or pendency of further proceeding under the Act cannot per se be a ground for withholding refund.
Issues: Whether the Commissioner of Sales-tax can withhold refund under Section 14-D of the Act without recording an opinion that the grant of refund is likely to adversely affect the revenue.
Ratio Decidendi: The court held that the Commissioner of Sales-tax must record an opinion that the grant of refund is likely to adversely affect the revenue before withholding refund under Section 14-D of the Act. The court also held that mere filing of an appeal or pendency of further proceeding under the Act cannot per se be a ground for withholding refund.
Final Decision: The court set aside the impugned orders of the Commissioner of Sales-tax and directed him to deal with the matter afresh and pass appropriate orders within two weeks.
JUDGMENT :
A. Pasayat, J. - These three writ applications are inter-linked and are disposed of by this common order.
2. The dispute relates to non-grant of refund flowing out of the appellate order passed by the Assistant Commissioner of Sales-tax, Cuttack I Range, Cuttack for three periods, i.e., assessment years 1991-92, 1992-93 and 1993-94. Grant of refund was refused purportedly in exercise of power u/s 14-D of the Orissa Sales-tax Act. 1947 (in short, the 'Act').
3. The undisputed position is that the refund of Rs. 1,65,821/-, Rs. 36,513/- and Rs. 14,721/- for the three years respectively flows from the first appellate order. The Sales-tax Officer, Cuttack I East Circle informed the petitioner vide letter dated 22.8.1998 in respect of first two years and vide letter dated 31.7.1996 in respect of the third year (annexed as Annexure-1 to each case) that the Commissioner of Sales-tax had been pleased to withhold the refund till disposal of the second appeals filed by the State u/s 14-D of the Act.
4. According to learned counsel for petitioner, the order is indefensible as the requirements of Section 14-D of the Act have not been complied with. It is submitted by learned counsel for Revenue that mention of withholding u/s 14-D of the Act is sufficient.
5. Orders passed by the Commissioner in respect of three years are contained in Annexure-9 to the writ application in each case. They read as follows :
OJC No. 13128 of 1998 (Assessment Year 1991-92)
"Preceding notes.
On the basis of proposal of the A.C.C.T., Cuttack-I Range in his letter at page 2/C refund of Rs. 1,65,821/- under the O.S.T. Act for the year 1991-92 may be withheld u/s 14-D of the O.S.T. Act till the disposal of 2nd appeal filed by the State.
Sd.
A.C.C.T. (TRS)
The 23rd Sept., 1995
Addl. Commissioner
(Central Zone)
Notes preceding.
The refund in question may be withheld
Sd.
23.9.1995
Addl. A.C.C.T. (C.Z.) Addl. A.C.C.T. (C.Z.)
Commissioner Sd. A.K. Samantray
27.9.1995
C.C.T. (O)"
O.J.C.No. 13191 of 1998 (Assessment Year 1992-93)
"Preceding notes.
Refund of Rs. 36,513/- under the O.S.T. Act for the year 1992-93 in case of M/s. National Trading Co., Malgodown, Cuttack may be withdrawn u/s 14-D of the O.S.T. Act till the disposal of 2nd appeal filed by the State as proposed by the A.C.C.T., Cuttack I Range, Cuttack in his letter at page 2/C.
Sd.
A.C.C.T. (TRS)
The 23rd Sept., 1995
Addl. Commissioner
(Central Zone)
Notes preceding.
The refund in question may be withheld.
Sd.
23.9.1995
Addl. C.C.T. (C.Z.)
Commissioner Sd. A. K. Samantray
27.9.1995
C.C.T. (O), Cuttack."
OJC No. 13192 of 1998 (Assessment Year 1993-94)
"Preceding notes for kind perusal.
Grant of refund in this case may adversely affect the revenue for the reasons indicated in the notes of Spl. P.A. (marked 'A') in the event the State eventually wins in the 2nd appeal. Hence we may withhold the refund in question till disposal of 2nd appeal filed by the State.
Sd./ 16.7.1996
I agree.
Sd. A. K. Samantray
22.7.1996
C.C.T. (O), Cuttack."
6. For bringing in operation of Section 14-D of the Act, condition precedent is that the Commissioner should be of the opinion that grant of refund is likely to adversely affect the revenue. The provision reads as follows :
"14-D. Power to withhold refund in certain cases - Where an order giving rise to a refund is the subject-matter of an appeal or further proceeding under this Act, the Commissioner may, if he is of the opinion that the grant of refund is likely to adversely affect the revenue, withhold the refund till such time as he deems proper."
Opinion has to be formed and recorded before refund is directed to be withheld. On verification of record, we find that no such opinion has been recorded by the Commissioner. Mere reference to Section 14-D of the Act would not suffice because statutory mandate is that the Commissioner must be of the 'opinion' that grant of refund is likely to adversely affect the revenue. Opinion cannot be in vacuum, it has to form part of records.
7. 'Opinion' means something more than m
