Gopi Bar vs Commercial Tax Officer, Palakol

Syed Shah Mohammed Quadri, J.—The short question that arises for consideration in this writ petition, is whether an order directing refund of tax in implementation of the orders of the appellate authority can be passed after order u/s 33-C of the Andhra Pradesh General Sales Tax Act, 1957 (for short "the Act") has been passed by the concerned authorities.

The question arises in the following circumstances. The petitioner approached the appellate Deputy Commissioner against the order of assessment for the years 1983-84, 1984-1985 and 1985-1986. The appellate authority allowed the appeal of the petitioner by order dated September 25, 1995. Complaining that the said order of the appellate authority has not been implemented, the petitioner filed this writ petition for a writ of mandamus directing the respondent to implement the order of the Appellate Deputy Commissioner (C.T.), Vijayawada dated September 25, 1995 in Appeals Nos. 36 of 1993-94; 40 of 1993-94 and 35 of 1993-94 and to direct refund of the amount of the petitioner.

In the counter-affidavit filed by the respondent it is stated that the Joint Commissioner of Commercial Taxes (Legal), Hyderabad, issued show cause notice No. LV(2)/705/96-1, 2 and 3 dated June 24, 1996 proposing to revise the order of the appellate authority. It is further stated that the Deputy Commissioner, Commercial Taxes issued order dated July 25, 1996 u/s 33-C of the Act withholding refund of interest, and the writ petition therefore be dismissed.

Learned counsel for the petitioner contends that as the order u/s 33-C of the Act was not passed when the petitioner approached this Court this Court shall set aside the order withholding refund and direct refund of the amount. Learned Government Pleader on the other hand submits that having regard to the provisions of section 33-C of the Act, this Court may not exercise its jurisdiction under article 226 of the Constitution and direct refund. On the basis of the above contentions, the question that arises for consideration is whether an order directing refund of interest in implementation of the orders of the appellate authority can be passed after the passing of the order u/s 33-C of the Act. It may be pertinent to notice that the order of the appellate authority/revisional authority has to be implemented by the assessing authority in two months from the date of communication of the order and any excess tax or fee collected from the dealer, has to be refunded. Section 33-C of the Act empowers the Deputy Commissioner to grant approval for withholding refund. Section 33-C of the Act reads as follows :

"33-C. Power to withhold refund in certain cases. - Where an order giving 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 the grant of the refund is likely to adversely alter the revenue, 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 provision extracted above it is clear that where an order giving rise to refund of any amount to the assessee or the licensee is the subject-matter of appeal and further proceeding and the assessing authority is of the opinion that the grant of refund is likely to affect the interest of the revenue, such authority may, with the approval of the Deputy Commissioner, withhold the refund till such time as the Deputy Commissioner may determine. In the instant case, the order of approval of the Deputy Commissioner was given effect on July 25, 1996. Therefore, we are unable to say that the action of the respondent in not refunding the tax is illegal and arbitrary. We are also unable to agree with the contention of the learned counsel for the petitioner that the order u/s 33-C of the Act should be passed within two months within which time the assessing authority under rule 35 of the Andhra Pradesh General Sales Tax Rules, 1957 is bound to give effect to the order. We are, however, of the view that rule 35 of the Andhra Pradesh General Sales Tax Rules, 1957 is only recommendatory and not mandatory and that once an order u/s 33-C is made no refund can be granted thereafter whether within two months or beyond. Though the order of the appellate authority or any other authority directing refund of tax, in the absence of an order u/s 33-C, should be implemented within two months of its communication, yet any refund made beyond two months cannot be said to be an illegal exercise of power. It is desirable that power u/s 33-C should be exercised and the assessing authority should seek the approval of the Deputy Commissioner to the proposal of withholding refund on the ground that it would be prejudicial to the interest of the revenue within two months of the communication of the order of the appellate or any other authority giving rise to refund of tax or fees but if the approval is sought or is received beyond two months, the assessing authority cannot be directed to refund the tax or fees ignoring the approval of the Deputy Commissioner granted u/s 33-C of the Act.

For the above reasons, we are not inclined to exercise the extraordinary jurisdiction under article 226 of the Constitution of India to direct the respondent to refund the tax pursuant to the order of the Appellate Deputy Commissioner in Appeal Nos. 36 of 1993-94, 40 of 1993-94 and 35 of 1993-94 dated September 25, 1995 as the Deputy Commissioner granted approval u/s 33-C of the Act during the pendency of revision before the Joint Commissioner. The writ petition is therefore dismissed. No costs.

Petition dismissed.