Case Law Details
It is plain to the Court that it is only when the Assessee came forward with the present petition complaining of the failure by the DVAT Department to process its refund claim in terms of Section 38 of the DVAT Act, that the DVAT Department decided to examine the return filed more than four years earlier. While, technically, it could be argued that these default assessment orders were passed within time they were in fact issued on the last date of expiry of limitation. The Court cannot be blind to what the orders really purport to do. They are intended to frustrate the issuance of refund orders for the periods in question which are long overdue.
10. The Court is constrained to observe that there has been a persistent attempt by the DVAT Department to somehow ensure that the refund claims are defeated by creating fresh demands which are then adjusted against the refund amount. This is a pattern that the Court has been observing in several petitions listed before it on a daily basis. Despite several judgements of this Court lamenting the utter failure of the DVAT Department to act in accordance with law, the approach and attitude of the DVAT Department towards refund claims has not changed one bit. The harassed dealers awaiting refunds for several years are compelled to repeatedly come to this Court for orders.
On a daily basis, the Court has been passing orders, giving time-bound directions to the DVAT Department to process the refund claims and pay amounts. Yet, nothing seems to alter the routine behavior of the VATOs concerned. Like in the present case, they utilize the opportunity provided by the pendency of the writ petition seeking refund that is long overdue to create fresh demands. This conduct of the VATOs deserves the strongest condemnation. It is nothing but an abuse of statutory powers. The mere fact that default assessment of tax and interest is being passed on the last date of the expiry of the limitation period, will not in the circumstances noticed herein before, save such orders from the vice of illegality.
The Commissioner, VAT is directed to examine why fresh demands are being created by the VATOs virtually on the last date of the expiry of the limitation period and that too after a writ petition has been filed by the Assessee seeking directions for refunds that are long overdue, and after notice has been issued thereon. The Commissioner, VAT should ensure that this kind of abuse of statutory powers must stop.
FULL TEXT OF THE HIGH COURT ORDER / JUDGMENT
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To ADD
One is instantly provoked to recall the Del. HC judgment in Bansal’s case, adverse to the Revenue (see previous Posts/comment). There has been no further report on the outcome or new development; also on the refund status of service tax collected in that and those other cases, by virtue of the HC holding against the constitutional validity of such levy and collection.Any feedback ?
OFFHAND
This is a strikingly detestable instance, recurring almost as a matter of routine, of delay, more so of a deliberate delay, in grant of excess tax paid; that has rather become a part of the procedure, but unwritten law.
To one’s understanding, even under the GST code, the prescribed refund procedure is not hassle- free but is most likely to prove quite cumbersome. The correctness of the claim for refund is required to be certified; after satisfying the conditions laid down. The primary objective of such conditions, intended to work as checks and balances, is to guard against ‘unjust enrichment’ by taxpayer.
However, on the flip side, the point for focus is this: Do not any delay, if deliberately indulged in by the tax authority, virtually result in an unjust enrichment of the government, so to say? If so, should not the refund procedure be much more simplified, in order to ensure settlement of refund strictly within the time limit; and any delay, deliberate or otherwise, should automatically entitle tax payer to compensatory interest?
For an intimate insight into the refund mechanism, complex to the core, as embodied in the GST Code, among other material, recommend to look up the article lately published in the ICAI Journal, 2017 May Issue (pgs. 1563 -1567)