M/s. Saraf Trading Corporation etc. Vs. State of Kerala -Supreme Court – Section 44 of the KGST Act is very clear and it stipulates that it is only the dealer of tea on whom the assessment has been made and it is only he who can claim for refund of tax. In view of the clear and unambiguous position, the appellant cannot claim for refund of tax collected from the seller of tea. It is clearly provided in the principles of Interpretation of Statutes that when the meaning and the language of a statute is clear and unambiguous, nothing could be added to the language and the words of the statute.
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS. 474-481 OF 2011
[Arising out of SLP(C) Nos. 189-196 of 2008]
M/s. Saraf Trading Corporation Etc. Etc. … Appellants
Versus
State of Kerala ... Respondent
Coram: Justice Dr. Mukundakam Sharma and Justice Anil R. Dave
Date of Judgment: January 13, 2011.
J U D G M E N T
Dr. Mukundakam Sharma, J.
1. Leave granted.
2. The issue that falls for consideration in the present appeals is whether the appellant/assessee would be entitled for refund of the tax which was paid by him to the seller, in view of the provisions of Section 44 of the Kerala General Sales Tax Act, 1963 (for short “the KGST Act”) . One additional issue which was urged at the time of hearing of the appeals and requires consideration by this Court is as to whether the appellant would at all been titled to claim exemption under Section 5(3) of the Central Sales Tax Act, 1956 (for short “the CST Act”), as at the time of sale, the appellant could not allegedly show any evidence that it was the penultimate sale.
3. The aforesaid two issues have arisen for consideration in the light of the submissions made on the basic facts of these appeals which are hereinafter being set out:-
4. The appellants are exporters of tea. The appellants purchased tea from the tea planters directly in open auction and there after exported the same to foreign countries. The appellant being the exporter of the aforesaid consignment claimed for exemption on the ground that purchase was exempted under Section 5(3) of the CST Act. The said claim for exemption was found to be genuine by the Assessing Authority, and was allowed in full. The appellant also made a claim for refund of tax collected from them by the seller at the time of purchase of tea. The said claim was rejected by the Assessing authority and it was held that they cannot claim for refund under Section 44 of the KGST Act since they have not paid the tax to the Department but it was the sellers who have paid the tax and therefore under the provisions of Section 44of the KGST Act, the refund that could be made is to the dealer only and the assessee being not a dealer no such refund could be made to the appellant/assessee.
5. Being aggrieved by the aforesaid order, the appellant filed an appeal before the Deputy Commissioner (Appeals) who considered the contentions of the appellant and upon going through the records found that there is an observation recorded by the assessing authority that the export sales is pursuant to the prior contract or prior order of the foreign buyers and also that export sales are supported by bill of lading, export invoices etc. The appellate authority also recorded the finding that the claim of exemption under Section 5(3) of the CST Act is envisaged for the penultimate sales or purchase preceding the sale or purchase occasioning the export. However with regard to the refund it was noted that the goods purchased are taxable at the sale point and hence the liability to pay tax is on the part of the seller. Accordingly, it was for the Seller to prove that the sales are effected to an exporter in pursuance of prior contract or prior orders of the foreign buyers.
6. It was held by the Appellate Authority that since, in the present case the aforesaid sellers namely the planters who sold tea to the appellant and on whom the burden lies to prove before the assessing authority that his sale is for fulfilling an agreement or order of the foreign buyer had not satisfied those conditions and had also not discharged his burden, therefore, there is no question of refund in the present case to the appellant as they are not entitled to any such refund under the provisions of Section 44 of the KGST Act.
7. The appeal was filed there from to the Kerala Sales Tax Appellate Tribunal, which after going through the records referred to the provisions of refund as contained in Section 44 of the KGST Act, which reads as follows:-
“44. Refunds:- (1) When an assessing authority finds, at the time of final assessment, that the dealer has paid tax in excess of what is due from him, it shall refund the excess to the dealer. 1. 2. When the assessing authority receives an order from any appellate or revisional authority to make refund of tax or penalty paid by a dealer it shall effect the refund. 2. 3. 3. Notwithstanding anything contained in sub-section (1) and (2), the assessing authority shall have power to 7 adjust the amount due to be refunded under sub- section (1) or sub-section (2) towards the recovery of any amount due, on the date of adjustment, from the dealer. 4. 5. 4.In case refund under sub-section (1) or sub-section (2) or adjustment under sub-section (3) is not made within ninety days of the date of final assessment or, as the case may be, within ninety days of the date of receipt of the order in appeal or revision or the date of expiry of the time for preferring appeal or revision, the dealer shall be entitled to claim interest at the rate of six percent per annum on the amount due to him from the date of expiry of the said period up to the date of payment or adjustment.”
8. After referring to the said provision, it was held by the Tribunal that in case the dealer has paid the tax in excess of what was due from him it could be refunded to the dealer, but here is a case where not the dealer but the appellant had claimed exemption under Section 5(1) read with Section 5 (3) of the CST Act. The assessing authority accepted the claim and allowed exemption. But so far as the question of refund of tax is concerned, the Tribunal held that there is no question of refund of tax in the case of the appellant since no tax had been demanded from the appellant for all the four years and therefore in those circumstances, there could be no question of refund underSection44 of the KGST Act to the appellant.
9. In the light of the aforesaid findings, the appellate Tribunal dismissed the appeal as against which a Revision Petition was filed by the appellant before the Kerala High Court which was also dismissed under the impugned judgment and order as against which the present appeals were filed. We have heard the learned counsel appearing for the parties who had taken us through all the orders which gave rise to the aforesaid two issues which fall for our consideration in the present appeals.
10. Learned counsel appearing for the appellant submitted before us that appellant has admittedly paid the tax to the dealer at the time of occasion of sale made to it by the dealer namely the tea planters. It was also submitted by him that department has received the aforesaid tax paid in excess by the appellant and that there is a prohibition on the State to retain the excess tax in lieu of the provisions of Article265 and 286 of the Constitution of India.
11. It was also submitted by him that in addition to the provisions of Section 44 of the KGST Act, a proactive view has to be taken by this Court in the facts and circumstances of the present case by referring to the decision of this Court in the case of Mafatlal Industries Ltd. & Ors. Vs. Union of India & Ors. reported in (1997) 5 SCC 536.
12. The learned counsel appearing for the State, however, not only refuted the aforesaid submissions but also stated that since there is a specific provision in the State Act for giving refund of the excess amount of tax, if any, paid only to the dealer and not to any other person, there cannot be a pro-active consideration in the facts and circumstances of the present case as sought to be submitted by the learned counsel appearing for the appellant. He also submitted that aforesaid reference to the decision of Mafatlal (supra) is misplaced. The learned counsel for the State went a step further and submitted that the appellant is not entitled to claim any exemption under Section 5(3) of the CST Act in view of the fact that assessee could not produce any agreement at the time of purchase of the tea in the auction sale indicating that the purchase is made in relation to export.
13. In support of the aforesaid contentions, he referred to provision of Section 5(3) of the CST Act which is extracted herein before:- Section 5 – When is a sale or purchase of goods said to take place in the course of import or export ;
