Revenue Department has no power to re-adjudicate or re-quantify Refund Order

Revenue Department has no power to re-adjudicate or re-quantify Refund Order

GET and D India Limited Vs Deputy Commissioner (ST) (Madras High Court)

The Hon’ble Madras High Court in the case of GET and D India Limited v. Deputy Commissioner (ST) [W.P. No. 2460 & 3674 of 2023 dated November 16, 2023] directed the Revenue Department to refund the amount of tax as per refund order thereby holding that, the Notice cannot be issued when the excess tax amount has already been assessed and Revenue Department has passed the Refund Order. Also, the Revenue Department is not empowered to re-adjudicate or re-quantify while passing the Refund Order. Therefore, the Petitioner is entitled for the refund.

Facts:

M/s. GET and D India Limited (“the Petitioner”) has filed a Writ Petition to quash the notice dated January 24, 2023 (“the Impugned Notice”) and directing the Revenue Department (“the Respondent”) to refund the excess tax amount, along with interest, under Section 42(5) of the Tamil Nadu Value Added Tax Act, 2006 as per assessment and refund order dated September 22, 2022 (“the Refund Order”).

Issue:

Whether the Revenue Department has the power to re-adjudicate or re-quantify Refund Order?

Held:

The Hon’ble Madras High Court in the case of W.P. No. 2460 & 3674 of 2023  held as under:

• Noted that, the Refund Order was passed wherein the amount of excess tax with the Respondent was determined. Pursuant to the Refund Order passed, the Petitioner filed a refund application. The Respondent, after passing the Refund Order and filing the Refund Application, once again issued the Impugned Notice to the Petitioner and called for the particulars, as if to revise its order.
• Opined that, the Impugned Notice cannot be issued when the excess tax amount has already been assessed and the Respondent has passed the Refund Order. Also, the Respondent is not empowered to re-adjudicate or re-quantify while passing the Refund Order. Therefore, the Petitioner is entitled for the refund.
• Held that, the Writ Petition is allowed.
• Directed that, the Respondent should refund the amount as per the Refund Order along with interest. In case of non-compliance of the Order of the Court, the Respondent authorities shall before the Court.

Conclusion:

The Madras High Court, in allowing the Writ Petition, established a significant precedent by asserting that the Revenue Department does not possess the power to re-adjudicate or re-quantify a refund order. The decision provides clarity on the limitations of the department once a refund order has been issued, reinforcing the rights of taxpayers in such matters.

FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT

The Writ Petitions have been filed seeking a direction to the respondents to refund the excess tax amount to an extent of a sum of Rs.2,06,22,234/- along with interest in terms of Section 42(5) of the Tamil Nadu Value Added Tax Act, 2006 (hereinafter referred to as the ‘Act’) as per the assessment and refund order in CST No.50806/2013-14 dated 22.09.2022 and to quash the impugned notice dated 24.01.2023, issued by the 1^st respondent.

2. Mr. Joseph Prabakar, learned counsel for the petitioner would submit that the refund order dated 22.09.2022, for the assessment year 2013­2014, was passed by the 1^st respondent determining the excess tax amount lying with the department for a sum of Rs.2,06,22,234/-. Pursuant to the said refund order, an application for refund was made by the petitoner before the 1st respondent. However, instead of granting refund, the impugned notice dated 24.01.2023 was issued by the 1^st respondent whereby calling upon the petitioner to furnish the details to re-determine the refund order.

3. Further, the learned counsel for the petitioner would submit that once the refund order is issued, the 1^st respondent is supposed to have processed the refund. Except processing, the said Officer is not at all entitled in any way to re-quantify the said refund. If any defect is found by the Officer, the same can only be carried out by way of re-assessment order or revision order. Therefore, he would contend that in spite of refunding the excess amount in terms of the order dated 22.09.2022, the refund Officer had issued the said impugned notice dated 24.01.2023 beyond his jurisdiction. Hence, the present writ petition has been filed.

4. Ms. Amirta Poonkudi Dinakaran, learned Government Advocate appearing for the respondents would submit that as per Circular dated 07.10.2020, issued by the 3^rd respondent, wherein, it is stated that if the refund amount is over and above a sum of Rs.25,00,000/-, then it has to be approved by the 2^nd respondent-Joint Commissioners (ST) Large Taxpayers Unit, Chennai.

5. Heard the learned counsel for the petitioner and the respondents and also perused the materials available on record.

6. Upon hearing and perusal of the impugned order and other documents, it appears that the refund order was passed on 22.09.2022 whereby the 1^st respondent had determined the excess tax amount available with them to an extent of a sum of Rs.2,06,22,234/-. Pursuant to the said refund order, the petitioner had filed a refund application before the 1st At this juncture, the respondent had once again issued a notice to the petitioner and called for the particulars, as if, he is going to revise his own order.

7. As far as the 1^st respondent is concerned, he has already assessed the excess tax amount and passed the refund order dated 22.09.2022. Having passed the same, the 1^st respondent cannot issue the impugned notice dated 24.01.2023 without any provision of the law much less in terms of the Section 42(5) of the Act, and thereby the petitioner is entitled for the refund.

8. Therefore, there is no doubt that the first respondent had issued the said notice beyond the scope of his jurisdiction, since in the course of processing of the refund application, the 1^st respondent is not empowered to re-adjudicate or re-quantify while passing the refund order.

9. The learned Government Advocate appearing for the respondents would submit that they are in the process of refunding the excess tax amount.

10. Though the respondent would submit that they are in the process of refunding the excess tax amount, no effective steps have been taken by them till date.

11.Under these circumstances, this Court is inclined to direct the 1st and the 2^nd respondent to refund the excess tax amount lying with the department to an extent of a sum of Rs.2,06,22,234/- along with interest as per the refund order in CST No.50806/2013-14 dated 22.09.2022. The said exercise is directed to be completed on or before 05.12.2023.

12. Post this matter on 08.12.2023 under the caption ‘for reporting compliance’. In the event of failure to comply this order, this Court directs the respondents 1 and 2 to appear before this Court on 08.12.2023 and provide reasons for non-compliance of this order.

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