COUNTRY BUILDER PVT. LTD Vs. STATE OF HARYANA

JUDGEMENT

(1.) This shall dispose of two petitions namely CWP No. 20823 and 18723 of 2012, as common questions of facts are involved in both the cases. For facts, CWP No. 20823 of 2012 is being referred to. The present petition has been filed under Article 226 of the Constitution of India praying for issuance of a writ in the nature of certiorari quashing order dated 27.09.2012 (Annexure P-5) whereby, approval for withholding refund of Rs. 21,88,947/- was ordered by the Excise and Taxation Commissioner, Haryana-respondent No. 4 (hereinafter referred to as "The Commissioner") and for a direction to refund the said amount alongwith interest thereon.

(2.) The pleaded case of the petitioner is that it is a private limited company and engaged in the business of Contractor and a registered dealer under the Haryana Value Added Tax Act, 2003 (hereinafter referred to as "The Act") and also under the Central Sales Tax Act, 1956. The petitioner is having TIN No. 06461217440 and is registered at Faridabad in Haryana. The return for the assessment year 2008-09 had been filed which was taken up for scrutiny and assessment was finalized on 08.02.2012. The petitioner was found entitled to refund of Rs. 22,94,392/-, Since no refund was received, the petitioner approached the authorities and was informed that the audit had raised certain objections in May, 2012. The Deputy Excise & Taxation Commissioner, Faridabad East (hereinafter referred to as "DETC") recommended issuance of refund of Rs. 21,88,947/-. The departmental authorities were of the view that the finalization of audit objections would take time, therefore, a surety bond/security from the Director of the company be taken to safeguard the interest of the department. Surety bond was furnished for Rs. 23 lacs on 13.06.2012, which was verified and found to be genuine and solvent. However, the assessing authority was asked for a report, who was of the opinion that recovery was not possible in normal course. A notice of revision was issued to the petitioner on 29.08.2012 for 12.09.2012 and inspite of the request of the petitioner made on 24.08.2012 and 18.09.2012, order dated 27.09.2012 was issued under Section 21 of the Act withholding the refund. Referring to Section 21 of the Act, it was pleaded that the order was non-speaking and violative of principles of natural justice. Reliance was also placed upon decision of this Court in C.W.P. No. 19172 of 2006 titled M/s Ratti Woolen Mills v. State of Punjab and others, decided on 01.02.2007 (Annexure P-6).

(3.) In the written statement filed by respondents No. 1 to 4, it was admitted that vide assessment order dated 08.02.2012, refund of Rs. 21,88,947/- had been approved. It was, however, submitted that proceedings under section 34 of the Act were pending before respondent No. 3 i.e. DETC (ST), Faridabad (East). It was further averred that respondents No. 2 and 3 were of the opinion that the revisional action would end up in drastic reduction of amount of refund and, therefore, a request was made to respondent No. 4 for ordering withholding of refund in terms of Section 21(2) of the Act. It was further submitted that the order by respondent No. 4 had been made after examining the satisfaction of respondents No. 2 and 3 as regards the adverse effect on recovery of tax dues. It was further pleaded that the petitioner had approached this Court without exhausting the statutory remedies of the first and second appeals provided under the Act. Reliance was placed upon the judgment of the Hon'ble Apex Court in Titaghur Paper Mills Co. Ltd. and another v. State of Orissa and others, 1983 53 STC 315. The judgment in CWP No. 19172 of 2006 was sought to be distinguished on the ground that it was under the Punjab Act. It was further submitted that there is an under assessment amounting to Rs. 51,75,871/- as per the audit objections and, therefore, the surety bond of Rs. 23 lacs could not be considered adequate. The additional revenue of Rs. 28,75,872/- would be added if the audit objections are found to be correct Section 21 of the Act did not provide any provision for envisaging issuing of notice or affording of opportunity of hearing prior to an order under Section 21(2) of the Act. The order under Section 21 of the Act is appealable under Sections 33 and 36 of the Act.