ANAND GRAMODYOG SAMITI Vs. COMMISSIONER OF TRADE TAX

JUDGEMENT

(1.) The basic question involved in the present revision is whether a law abiding tax payer, who has paid tax from his own pocket, should be placed at worst position than the person who has not paid the tax. The facts which are either not disputed or, at this stage beyond the pale of controversy may briefly be noticed. The dispute relates to the assessment year 1995-96. The applicant is holder of a certificate issued by U.P. Khadi and Village Industries Board and the Unit of the applicant carried on the manufacturing and selling of Fan and Pump. According to the certificate granted by U.P. Khadi & Village Industries Board, unit of the applicant, is engaged in the work of "Black smith". The disclosed turnover of sale of Fan and Pump manufactured by the applicant has been accepted by the authorities below. The dispute in the present revision relates to the period 1-4-1995 to 30-9-1995 only. During the aforesaid period the applicant denied its liability to pay any tax on the sale of Fan and Water pump manufactured by it although it deposited the tax, under protest along with monthly returns of the turnover. In the aforesaid period the Fan was taxed at the rate of 10% and that of Water Pump at the rate of 5%. It may be noticed here that for the remaining period of the relevant assessment year, the assessing authority itself granted exemption from payment of sales tax on the aforesaid goods in view of the notification dated 1-10-1995. The benefit of the circular No. 2444 was not extended to the applicant for the disputed period namely 1-4-1995 to 30-9-1995 on the ground that the applicant has already deposited the tax, therefore, the claim of refund of tax thus deposited was negativated and not liable to be entertained, in absence of any such provision for the refund in the said Circular No. 2444 dated 30-3-1996. In first appeal, the Deputy Commissioner (Appeals) Trade Tax disagreed with the assessing Officer and granted refund of the amount of tax deposited by the dealer applicant for the disputed period. The order of Dy. Commissioner (Appeals) has been set aside by the Tribunal in appeal, filed by the department. The Tribunal has held that within the four corners of U.P. Trade Tax Act, there being no provision of refund of such an amount, no order granting refund can not be passed. Challenging the legality, validity and propriety of the order of the Tribunal dated 8-10-1988 passed in Second appeal No. 675 of 1998 present revision has been filed under Section 11 of U.P. Trade Tax Act.

(2.) Heard Sri Gaurav Mahajan, Advocate, holding brief of Sri Piyush Agarwal, learned counsel for the applicant and Sri Bipin Pandey learned Standing Counsel for the department.

(3.) Learned Counsel for the applicant submitted that the Tribunal committed illegality in not allowing refund of the amount of tax deposited by the applicant under protest. It was submitted that it has been found as a matter of fact, by the authorities below that the applicant has not realized any amount from the customers and the tax was deposited by it out of his own pocket. The department by issuing Circular No. 2444 dated 30-3-1996 has directed the assessing authority to grant remission of tax, interest and penalty, if levied on the person holding certificate granted by U.P. Khadi and Village Industries Board. Elaborating the argument it was submitted that the aforesaid Circular was issued on the representation made by certificate holders of U.P. Khadi and Village Industries Board. A representation was made to the State Government that such certificate holders have neither realized the tax nor deposited tax and in this background the aforesaid Circular was issued on the supposition that such persons have neither realized nor deposited the tax. It was never the intention of the said Circular not to extend the benefit to such dealer who have deposited the tax out of their own pocket. On the other hand learned Standing Counsel submitted that there being no express provision for refund of tax, interest or penalty in the said Circular, the applicant is not entitled for refund of tax amount even if it was deposited by it and was not realized from the customers. He laid much emphasis on the finding of the authorities below that the liability to pay tax on the sale of such goods is there on the applicant in view of the relevant notification and as such it cannot be said that tax was not due from the applicant.