SUTLEJ INDUSTRIES LIMITED Vs. STATE OF PUNJAB

JUDGEMENT

(1.) This is a petition for issuance of a writ of mandamus to the respondents to pay interest on the amount of Rs. 2,43,000 refunded to him in pursuance of the order passed by the Sales Tax Tribunal, Punjab, (for short, "the Tribunal" ). The facts necessary for deciding the petitioner's claim are that by an order dated March 27, 1995 passed under section 14-B (7) of the Punjab General Sales Tax Act, 1948 (for short, "the Act"), the Excise and Taxation Officer-cum-Officer, In-charge, Sales Tax Check Barrier, Harsa Manser, District Hoshiarpur, imposed penalty of Rs. 2,43,000 on the petitioner on the ground that it was transporting goods without necessary documents. The appeal filed by the petitioner against the penalty order was dismissed by the Deputy Excise and Taxation Commissioner (Appeals), Jalandhar, but the second appeal filed by it was allowed by the Tribunal vide its order dated September 8, 1997. After about ten months, the petitioner submitted application, annexure P4, dated July 16, 1998 to the Assistant Excise and Taxation Commissioner, Hoshiarpur, for refund of Rs. 2,43,000. In reply, the officer concerned vide letter dated July 25, 1998 (annexure P5) informed the Senior Manager of the petitioner that the amount of Rs. 2,43,000 had been sent to the Excise and Taxation Officer, Jalandhar and, therefore, he should correspond with that officer for the purpose of refund. Thereafter, representative of the petitioner submitted representations, annexure P6, dated July 29, 1998, annexure P7 dated August 17, 1998, annexure P8 dated September 19, 1998 and annexure P9 dated December 4, 1998 to the Deputy Director (Enforcement)-cum-Assistant Excise and Taxation Commissioner, Jalandhar, for refund of the amount, but the latter did not give any response till June, 1999 when the refund voucher dated June 9, 1999 was issued in favour of the petitioner. After encashing the refund voucher, which took about three months due to the technical objections raised by different authorities, the petitioner submitted applications, annexures P13 to P15 for payment of interest in accordance with section 12 (3) of the Act and having failed to get the desired relief, it has invoked jurisdiction of this Court under article 226 of the Constitution of India for directing the respondents to pay interest for the period from April, 1995 to September, 1999. In support of its claim, the petitioner has relied on the following decisions :

(2.) The argument of Shri Khosla that the Excise and Taxation Officer-cum-Officer In-charge, Sales Tax Check Barrier, does not fall within the ambit of expression "assessing Authority" has no bearing on the decision of the petitioner's claim for payment of interest in accordance with section 12 (3) of the Act because what has been contemplated by that section is that the dealer shall get interest if there is a delay in the payment of the amount required to be refunded by the Assessing Authority. The facts of this case show that the amount of penalty was deposited by the petitioner in pursuance of the order passed by the Excise and Taxation Officer-cum-Officer In-charge, Sales Tax Check Barrier. When the order of penalty was set aside by the Tribunal, the petitioner became entitled to get refund of the amount deposited by it. The Joint Director (Enforcement)-cum-Assistant Excise and Taxation Commissioner refunded the amount to the petitioner after a gap of more than two years and three months and as it has not been pleaded by the respondents that the said officer does not fall within the definition of the Assessing Authority under section 2 (a) of the Act, the petitioner's entitlement to get interest cannot be questioned.

(3.) We are further of the view that even if section 12 (3) of the Act is held not applicable in the matter of refund of the amount of penalty deposited in pursuance of the order made under section 14-B (7) of the Act, the petitioner deserves to be awarded interest by applying the common law principle that a person who retains the money of other without lawful authority must compensate the latter by paying interest. In this case, the petitioner became entitled to get the refund of the amount deposited by it immediately after the acceptance of its appeal by the Tribunal, but the actual payment was made after a period of two years and three months. This shows that the money due to the petitioner was retained by the respondents for that long without any lawful authority. For this, they must compensate the petitioner and in our opinion, the rate of interest prescribed under section 12 (3) of the Act can be treated as reasonable yard-stick for compensating it.