PURSHOTTAMDAS DWARKADAS PATEL Vs. STATE OF BOMBAY

JUDGEMENT

(1.) THE main grievance in this case is as regards an application for refund made by the applicants on 1st March, 1953, under section 13 of the Bombay Sales Tax Act of 1946. That section provides as follows : "THE Collector shall, in the prescribed manner, refund to a registered dealer applying in this behalf any amount of tax paid by such dealer in excess of the amount due from him under this Act, either by cash payment or, at the option of the dealer, by deduction of such excess from the amount of tax due in respect of any other period : "Provided that no claim to refund of any tax paid under this Act shall be allowed unless it is made within twenty-four months from the date on which the order of assessment was passed or within twelve months of the final order passed on appeal, revision, or reference in respect of the order of assessment, whichever period is later. "Provided further that the Collector shall first apply the excess paid in respect of any period towards the recovery of any amount in respect of which a notice under sub-section (4) of section 12 may have been issued and shall then refund the balance remaining, if any". THE assessment order was made on 28th November, 1952. On receipt of the application for refund dated 1st March, 1953, the Sales Tax Officer on 23rd December, 1954, intimated that he could do nothing in the matter as he had already made an assessment and that the applicants might prefer an appeal. THE period of assessment was from 1st May, 1949, to 31st March, 1951. THE application for refund was based on the contention that during the period of assessment there had been some inter-State trade amounting to Rs. 12,844-10-0 and that the said application was made in view of the Supreme Court's decision on the subject given on 30th March, 1953, but known beforehand to the applicants on the date of their application. THE application on 1st March, 1953, claimed a refund of Rs. 1,192-11-0, though the application was not made in the prescribed Form No. XIX. On 5th June, 1953, they made a second claim for refund to the extent of Rs. 13,697-0-9 to the Sales Tax Officer in which the amounts claimed in respect of each quarter were separately shown. An appeal against the assessment order was summarily rejected as time-barred by the Assistant Collector. THE question of refund was again agitated in a revision application which was dealt with by the Additional Collector. He noted that the claim for refund had not been raised by the applicants at the time of the assessment. THE second application for refund dated 5th June, 1953, was made after the decision of the Supreme Court had become known to them. THE appeal was delayed, according to the applicants, because the Sales Tax Officer had made a considerable delay in replying to their applications for refund, when he suggested that an appeal should be filed. According to the Additional Collector of Sales Tax, "if a dealer claims for a refund he has to put in his claim at the time of assessment before the Sales Tax Officer" and that even after the assessment order had been passed the applicants were at liberty to prefer an appeal against the assessment order in time if they subsequently thought that they had forgotten to put in their claim for refund at the time of assessment. As neither of these courses had been adopted by the applicants, the Additional Collector dismissed the application for refund, remarking, "For this rejection, therefore, the applicant has to thank himself".

(2.) MR. Kabe for the opponent has contended that section 13 of the Act contemplates that an application for refund should be made at the time of assessment and that the assessment order itself should in the first instance deal with the question of refund. That contention is not supported by the decision of the Madhya Pradesh Board of Revenue in the case of Sheikh Gauhar Sheikh Nazir v. The State ([1952] 3 S.T.C. 331). In that case the appellant was assessed to sales tax for the three years 1946-47, 1947-48 and 1948-49, and during every one of the three years the sale price of imported goods sold by the appellant was below Rs. 5,000 and the turnover was below Rs. 25,000. On 28th July, 1951, the appellant applied for refund of the entire tax paid by him for all the three periods, relying on the High Court's judgment in Ayodhyaprasad v. The State ([1951] 2 S.T.C. 44), delivered on 12th September, 1950. The Commissioner rejected the application for refund for all the three periods. None of the three orders of assessment formed the subject of appeal, revision, review or reference. The Board of Revenue held that the claim for refund for the two periods was time-barred under section 13 of the C.P. and Berar Sales Tax Act, 1947, and that the claim lodged for the third period was within time and deserved examination on merits. In this case also a claim for refund was made on the basis of a judgment which became known to the dealers in question after the assessment had been made within the period of limitation allowed for an application for refund. In the Sales Tax Act applicable to this case the period of limitation was one year instead of two years as in the Bombay Sales Tax Act, 1946. In our opinion the view taken by the Additional Collector and pressed by MR. Kabe is not correct, as section 13 of the Act makes no mention of any requirement that the claim for refund should be made before the assessment order is passed by the Sales Tax Officer. In a few cases the order of refund may be made by the assessing authorities, but that does not appear to be the general practice; there is no column in Form No. XIX in which the grant of a refund is to be shown. If an application for refund is not made before the assessment is made, it would not ipso facto nullify a claim for refund which can be made within 24 months from the date on which the order of assessment is passed. The very language used in this connection clearly shows that the claim to refund is ordinarily expected to be made after the order of assessment has been made. The order of assessment having been made on 28th December, 1952, by the Sales Tax Officer the claims to refund made on 1st March, 1953, and 5th June, 1953, were clearly within time, and they should have been dealt with on their merits by the Sales Tax Officer and a refund made, if admissible, by modifying the order of assessment already passed. In such a case there could be a separate appeal from the order made by the Sales Tax Officer on the claim to refund and also subsequent revision applications to the Collector and this Tribunal.