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IN THE HIGH COURT OF TRIPURA AGARTALA
AKIL KURESHI, S.G. CHATTOPADHYAY, JJ.
M/s. Nandini Impex Pvt. Ltd. - Petitioner
Versus
The State of Tripura, represented by the Principal Secretary, Finance Department, Civil Secretariat & Ors. - Respondents
WP(C) No. 139 of 2021
Decided On : 31-08-2021
Tripura Value Added Tax Act - Section 4, 34 - In absence of any transfer of material or machinery during the course of execution of the work, no sale takes place as per the provisions of TVAT Act - There is no transfer of property in goods and, in this transaction the petitioner has no VAT liability - It was necessary that KSS deducts 4% of gross amount of bill at the time of payments on provisional basis - Petitioner approached the revisional authority under the TVAT Act and sought refund of the tax collected in excess.
Finding of the Court: The assessee had not paid tax voluntarily. From the beginning the assessee had contested any collection of tax from its payments by KSS - The assessee had every right to dispute such collection and such dispute when raised in the return filed, had to be adjudicated by the Superintendent. The amount so collected cannot be retained without adjudication. Not framing the assessment till the return gets time barred cannot be the ground for retaining such tax - The Superintendent not having framed assessment, must refund the amount in question to the petitioner with statutory interest.
Result: Petition disposed of.
JUDGMENT :
Akil Kureshi, J.
The petitioner has challenged an order dated 23.04.2018 as at Annexure-8 to the petition. He has prayed for the grant of refund of a sum of Rs.24,21,007/- which was deducted from the petitioner's bills in course of execution of a work contract for the assessment period 2010-11 to 2013-14. These prayers arise in following background:
2. Petitioner is a private limited company and is dealing in laying down and installation of pipes in the field of Gas, Electric and Telecom sectors with Trenchless technology called Horizontal Directional Drilling (HDD, for short). The petitioner was awarded a work order for laying/ installation of pipes through HDD technology in the city of Agartala by one Kazstrov Services Infrastructure India Private Limited (KSS, in short) on 21.12.2010. For execution of the said work the petitioner obtained a registration under the then in force Tripura Value Added Tax Act (TVAT Act, for short) in January, 2021. In the course of the execution of the work order the petitioner as a service provider paid service tax to the Central Excise and Service Tax Department, Government of India by depositing or adjusting service tax.
3. In the course of payment of the bills to the petitioner-company KSS had deducted tax of Rs.24,21,007/- during the year 2011-12. It appears that the said action was taken by KSS under the direction of the Superintendent of Taxes. The petitioner, therefore, wrote to the Superintendent of Taxes, Charge-V on 18.08.2011 and explained the detailed mode of execution of the work in order to point out that the petitioner is a service provider and is exigible to service tax. However, in absence of any transfer of material or machinery during the course of execution of the work, no sale takes place as per the provisions of TVAT Act. It was pointed out that there is no transfer of property in goods and, therefore, in this transaction the petitioner has no VAT liability.
4. On 01.09.2011 the Superintendent of Taxes, respondent No.4 herein, wrote to the petitioner stating that in pursuance to the work order in question the petitioner had imported taxable materials and this transaction, therefore, falls within Section 4 of TVAT Act and the purchase of material would invite VAT as per specified rate. It was, therefore, necessary that KSS deducts 4% of the gross amount of bill at the time of payments on provisional basis.
5. According to the petitioner, the case was covered under the service tax regime and no value added tax was to be paid. Despite this, in response to the notice issued by the respondent No.4 the petitioner also filed the returns under TVAT Act for the assessment period 2010-11 to 2013-14 on 19.09.2014. The company prayed for the refund of amount of Rs.24,21,007/- collected for the period during 2011-12. Since the petitioner did not receive any response to its returns filed and the request for refund of the tax collected in excess, the petitioner wrote to the respondent No.4 on 27.05.2015 and reminded that despite submission of all documents the assessment for the period 2010-11 to 2013-14 is pending and that the Superintendent may fix a date of hearing at the earliest. There was no response to this notice by the respondent No.4. The petitioner, therefore, wrote to the Superintendent on 19.04.2018 and reiterated the request for completion of assessment and refund of amount of Rs.24,21,007/- collected.
6. In response to the said letter, the Superintendent wrote to the petitioner on 23.04.2018 as under :
“Sir,
With reference to your letter No. Nil, dated 19.04.2018 I would like to inform you that due to provisional Bar under section 33 of the TVAT Act, 2004 it is not possible at this moment to take up the assessment case for the period from 2010-11 to 2012-13. However, in respect of assessment case for the period 2013-14 it is to be mentioned h ere that there is no time bar limit up to the period 31.03.2019. So, the assessment case for the period may be taken up under sect
SupremeToday
Taxation - Value added tax – Refund of - Assessee had every right to dispute such collection and such dispute when raised in return filed, had to be adjudicated by Superintendent - Amount so collecte....
An assessment order continues to be effective unless reviewed or modified in appeal and so long as an assessment order remains without any such review or modification, no claim for refund would be ma....
Public authorities must provide an opportunity to explain delays in tax refund claims before rejecting them as time barred.
The court emphasized that orders passed by administrative or quasi-judicial authorities are required to stand or fall on their own and subsequent explanations by way of affidavit(s) cannot be permitt....
Procedural violations in tax adjudication require rectification to uphold the rights to refunds and interests, emphasizing the need for jurisdiction and fair hearing in administrative processes.
Refund of service tax on exempt services barred by unjust enrichment if contract inclusive of tax and incidence passed on; refund proceedings cannot modify self-assessments.
Point of Law : Once statute provides for payment of interest and stipulated conditions are fulfilled, respondent/revenue would be obliged, in law, to pay interest.
Assessments beyond five years are invalid without proper notice, and best judgment assessments require rejection of returns, which was not adhered to in this case.
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