Golden Bar and Restaurant vs Commercial Tax Officer and Another

Syed Shah Mohammed Quadri, J.—As the question raised in these two writ petitions is common, we heard them together and are passing a common order thereon.

For appreciating the question involved in these cases we shall refer to the facts stated in W.P. No. 3096 of 1996. The petitioner is a dealer registered under the Andhra Pradesh General Sales Tax Act. He was running a bar and restaurant at Martair. Against the order of assessment the petitioner carried the matter in appeal, before the Appellate Deputy Commissioner, which was allowed and the Commercial Tax Officer, the first respondent, was directed to grant necessary relief pursuant to the order of the Supreme Court which was relied upon by the Deputy Commissioner. Thereafter refund of the tax was ordered to the petitioner. The petitioner claimed that interest ought to have been awarded on the tax refunded. The case went through several vicissitudes and ultimately the Sales Tax Appellate Tribunal allowed the appeal setting aside the order of the Deputy Commissioner and directed de novo hearing of the appeal. After hearing the appeal the Deputy Commissioner granted interest in respect of assessment years 1984-85 and 1985-86 by his order dated June 22, 1994. As that order was not given effect to the petitioner filed this writ petition seeking a writ of mandamus directing the respondents to implement the order of the Appellate Deputy Commissioner in Appeal Nos. 21 and 22 of 1994-95, dated June 22, 1994.

The first respondent filed a counter-affidavit admitting the material facts but raising the plea that u/s 20(2) of the Andhra Pradesh General Sales Tax Act the Joint Commissioner, CT, Legal has issued show cause notice to revise the order of the Appellate Deputy Commissioner on March 13, 1996. In view of this the order of the Deputy Commissioner cannot be given effect to.

Sri K. Venkateswara Rao, learned counsel for the petitioner, submits that merely because the revising authority has issued notice u/s 20(2) the first respondent cannot ignore the provisions of Rule 35 of the Andhra Pradesh General Sales Tax Rules and therefore the said order of the Deputy Commissioner has to be complied with. Learned Government Pleader, on the other hand, contends that as the revising authority has issued notice and as the order which is sought to be implemented is under consideration of the superior authority, the first respondent is justified in not giving effect to the order of the Appellate Deputy Commissioner.

The short question that arises for consideration is whether pendency of a revision u/s 20 is a ground to deny refund of tax for implementing the order of the appellate authority.

It will be appropriate to note here Rule 35 of the Andhra Pradesh General Sales Tax Rules.

"35. The order passed on appeal or revision shall be given effect to by the assessing authority who shall refund within two months from the date of the communication of the order any excess tax and surcharge or fee found to have been collected and additional tax and surcharge or fee which is found to be due, in the manner as if it were a tax and surcharge assessed by himself."

From a perusal of the rule extracted above it is evident that the order passed in appeal or revision has to be given effect to by the assessing authority who is bound to refund the amount that has become refundable to the assessee within two months from the date of communication of the order. It is true that Section 20 empowers the Joint Commissioner to revise the order suo motu to examine that part of any order passed or proceeding recorded by any authority, officer or person subordinate to it provided the order or the proceeding is prejudicial to the interest of the Revenue, in which case he has to make enquiry and initiate proceedings to revise, modify or set aside the order, and then pass final orders in regard to such matters of the revision. There is nothing in Section 20 which authorises the first respondent to ignore the order of the Appellate Deputy Commissioner and decline payment of tax which became refundable to the petitioner-assessee. In this context Section 33-C empowering the assessing or the licensing authority to withhold refund of tax is relied upon. That section reads :

"33-C. Power to withhold refund in certain cases.--Where an order giving rise to a refund to an assessee or licensee is the subject-matter of an appeal or further proceeding or where any other proceeding under this Act is pending, and the assessing or the licensing authority is of the opinion that grant of the refund is likely to adversely affect the Revenue, the assessing or the licensing authority may, with the previous approval of the Deputy Commissioner, withhold the refund till such time as the Deputy Commissioner may determine."

From a perusal of the above section it is clear that where an order which gives rise to refund to an assessee or licensee is subject-matter of appeal or revision or any other proceeding under the Act, then pending such proceeding the assessing or the licensing authority may withhold the refund if it is of the opinion that the grant of refund is likely to adversely affect the Revenue ; but such an order has to be passed with the previous approval of the Deputy Commissioner and it will be operative till such time as the Deputy Commissioner may determine. In this case admittedly no order is passed u/s 33-C of the Act. Therefore, the first respondent is not justified in law in withholding the refund. The same view is taken in W.P. No. 2891 of 1995 dated April 19, 1995 by a Division Bench of this Court to which one of us (viz., Syed Shah Mohammed Quadri, J.) was party. It was held therein that if no order was passed u/s 33-C at the relevant time, mere pendency of the revision could not be a ground for withholding refund of sales tax to the assessee. We, therefore, direct the first respondent to implement the order of the Appellate Deputy Commissioner in Appeal Nos. 21 and 22 of 1994-95 dated June 22, 1994 and refund the tax to the petitioner which became due to him pursuant to the said order, within four weeks from the date of receipt of a copy of this order.

Writ petitions are accordingly allowed with costs.