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Judgment
Sri M.S. Ramachandra Rao, J.—All these revision petitions are filed by the State u/s 22 of the A.P. General Sales Tax Act, 1957 (for short "the Act") challenging the common order dt. 27.10.2000 of the Sales tax Appellate Tribunal, Hyderabad. The respondents in all these revision petitions are engaged in the business of sale of soft drinks and food stuffs. All of them had been assessed to tax originally by various assessing authorities for the assessment years 1982-83, 1983-84, 1984-85 and 1985-86. They were subjected to tax on sales of soft drinks and food sold in their respective hotels/bar and restaurants during the said assessment years, originally, whether or not they have collected the said tax from the customers.
In view of certain decisions of the Supreme Court, supplies made by these assessees to consumers were not treated as sales exigible to sales tax under the above Act prior to coming into the force of 46th Amendment to the Constitution of India which introduced Sub Section (29-A) to Article 366 of the Constitution of India by the Constitution (46th Amendment) Act, 1982.
As per clause (f) of Sub Section (29-A) to Article 366 of the Constitution (after the 46th amendment to the Constitution), "tax on the sale or purchase of goods" included " a tax on the supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (whether or not intoxicating), where such supply or service, is for cash, deferred payment or other valuable consideration, and such supply of any goods were deemed to be a sale of those goods by the person making the supply and a purchase of those goods by the person to whom such supply is made."
The 46th Amendment came into force w.e.f. 2.2.1983 and the relevant provisions of Section 6 of the Amending Act provided:
Notwithstanding anything contained in Sub Section (1), any supply of the nature referred to therein shall be exempt from the aforesaid tax -
(a) where such supply has been made by any restaurant or eating house (by whatever name called), at any time on or after the 7th Day of September, 1978, and before the commencement of this Act and the aforesaid tax has not been collected on such supply on the ground that no such tax could have been levied or collected at that time; or
(b) ...
Provided that the burden of proving that the aforesaid tax was not collected on any supply of the nature referred to in clause (a) ... shall be on the person claiming the exemption under this Sub Section.
On the basis of the said 46th Amendment of the Constitution of India, the Andhra Pradesh General Sales Tax Act was amended and amending provisions came into force on 13-9-1985 with a corresponding provision as has been extracted from the 46th Amendment of the Constitution of India. The effect of the said amendment in the State Act, therefore, was that the benefit contemplated by the 46th Amendment was extended upto the date of the State legislation.
Questioning the imposition of tax on the sales of drinks and eatables made by them in their eating houses, the dealers approached the Supreme Court of India. The said dispute was adjudicated by the Supreme Court in its judgment reported in Shri Krishna Enterprises and Others Vs. State of Andhra Pradesh and Others,
The Supreme Court held that in view of the 46th Amendment of the Constitution and the consequent amendment to the A.P. General Sales Tax Act, 1957, all the petitioners before it were entitled to an opportunity to satisfy the appropriate authority that they had not levied or collected tax on the supply of soft drinks and food until 13.9.1985 and that they are entitled to exemption u/s 6 of the 46th Amendment and the State Law. It therefore set aside the assessments made by the assessing officers concerned and directed them to give opportunity to the assessees to satisfy them that no tax was collected until 13.9.1985. It directed that, after enquiry, if it is found that the assessees are not liable, then the whole, or if the assessees are found liable only partly, then the excess, shall be refunded to the assessees within one month of determination along with interest @ 12% from the date of payment till the date of refund. In the event of liability being found to be in excess of what has been collected, the assessing officer was granted liberty to collect the same in accordance with the provisions of law.
A petition for review of the above order of the Supreme Court filed by the State Government was subsequently rejected on 25.10.1989.
Thereafter, at the instance of the Commissioner of Commercial Taxes, the Government of Andhra Pradesh after examining the proposal of the Commissioner of Commercial Taxes, issued a Memorandum No. 16454/CT.II/1/90-8 dated 18.3.1992 directing that not only those dealers who filed Writ Petitions and obtained orders, but also those dealers who have not filed Writ Petitions should also be given benefit of the orders of the Supreme Court, provided, they questioned the correctness of the respective assessments and the matter was still alive. It also directed that where there are no pending proceedings, the authorities ought not to, now entertain independent application by assessees asking an opportunity to satisfy the authorities on the lines indicated in the Supreme Court judgment.
Some dealers running bars and restaurants/hotels filed Writ Petitions in the High Court seeking benefits of the judgment of the Supreme Court even though they had not originally filed the appeals against the assessment orders. The High Court disposed of the said Writ Petitions directing that those dealers can as well file appeals before Appellate Deputy Commissioner, seeking necessary relief. Accordingly, some of the dealers/respondents in the revision petitions herein, filed appeals before the Appellate Deputy Commissioners and when some Appellate Deputy Commissioners rejected those appeals, they filed further appeals to the Sales Tax Appellate Tribunal against such rejection orders. The Tribunal, by a common order in a batch of such 111 matters in TA No. 797/93 to 907/93 directed the Appellate Deputy Commissioners to register the appeals and dispose of the same on merits. Although initially such appeals were rejected, but later on further appeal and remand, it allowed them following the above decision of the Supreme Court in Sri Krishna Enterprises''s case (1 supra) and ordered refund of excess tax and remanded them to the respective assessing authorities for determining the excess amount of tax for refund.
But some assessees (18 in number who are respondents in TRCs. 185/2001, 186/2001, 188/2001, 190/2001, 192/2001, 193/2001, 194/2001, 202/2001, 207/2001, 208/2001, 220/2001, 222/2001, 225/2001, 226/2001, 230/2001, 260/2001, 114/2002 and 241/2003) followed a peculiar procedure like filing petitions u/s 20 of the Act before the Deputy Commissioner (CT), Chittoor for revision of the assessment orders on the lines of the order of the Supreme Court in the above case. They were granted relief by the Deputy Commissioner.
It is important to note that the orders of refund of tax granted either by the Appellate Deputy Commissioners or the Deputy Commissioners did not expressly mention that refund should also be made together with interest @ 12% per annum as was directed by the Supreme Court in the above case. In view of this, the respective assessing authorities issued orders of refund in Form-C either ordering refund or adjustment to the future tax liabilities but did not order any payment of interest @ 12% per annum.
Questioning the denial of interest @ 12% per annum, the respondents/assessees filed appeals before the concerned Appellate Deputy Commissioners. Those Appellate Deputy Commissioners allowed the appeals and directed the assessing authorities to give 12% interest also as directed by the Supreme Court.
The Joint Commissioner (CT) (Legal) in many cases and in some cases the Additional Commissioner (CT) and the Joint Commissioner (Legal) revised the above orders of the Appellate Deputy Commissioners granting payment of interest on the ground that the assessees/revision petitioners did not specifically ask in their respective appeals or petitions for payment of interest and also on the ground that when respective appellate authorities/revisional authorities have not granted interest, the assessing authorities who were carrying out the orders of such higher authorities cannot at all give interest. It was also stated that the claim of the assessees by way of appeal for payment of interest is barred by principles of res judicata/estoppel.
Aggrieved by the said orders, the assessees have filed appeals before the Sales Tax Appellate Tribunal, Andhra Pradesh, Hyderabad. The said appeals were allowed setting aside the Revisional orders and restoring the orders of the respective Appellate Deputy Commissioners granting interest @ 12% per annum on the excess tax collected found refundable/adjustable.
Challenging the same, the State has filed in all 30 TRCs., including the above referred TRCs. Of these, TRC No. 191/2001 and TRC No. 197/2003 have been disposed of.
Heard Sri Balaji Verma, Special Government Pleader for Commercial Taxes for the State and Sri M.V.J.K. Kumar, learned counsel for the assessees/dealers.
Before adverting to the respective contentions, we deem it appropriate to refer to the following provisions of the Act dealing with refunds and interest on delayed refunds.
Refunds : The assessing authority or the licensing authority, as the case may be, shall refund the tax or the licence fees, if any, paid, provisionally by an assessee or licensee for any particular period, if it is found to be in excess of the tax or the licence fees payable by him for the said period, or at the option of the assessee or licensee, adjust such excess towards any tax or licence fees due in respect of any other period :
Provided that the assessing or licensing authority, as the case may be, may first apply the excess paid in respect of any period towards the recovery of any amount, in respect of which a notice of demand may have been issued and shall then refund the balance, if any.
33-A. Form of claim for refund and limitation:
(1) Every claim for refund u/s 33, shall be made by the assessee or licensee in such form and verified in such manner as may be prescribed, on or after the date on which the tax or the licence fees in respect of which the claim is made was directed to be refunded.
(2) No such claim shall be allowed unless it is made within three years from the date specified in sub-section(1).
33-B. Refund on appeal, etc.:- Where as a result of any order passed in appeal or other proceeding under this Act, refund any amount becomes due to the assessee or licensee, the assessing or licensing authority shall refund the amount to the assessee or licensee without his having to make any claim in that behalf, or adjust or apply, such amount as provided in Section 33.
Section 33-BB. Non-refund of tax in certain cases :- Where a levy and collection of tax is held invalid by any judgment or order of a court or Tribunal, it shall not be necessary to refund any such tax to the dealer unless it is proved by the dealer to the satisfaction of the assessing authority that the tax has not been collected from the purchaser.
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 proceedings, 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 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.
33-D. Correctness of assessment not to be questioned :- In a claim for refund u/s 33, it shall not be open to the assessee or the licensee to question the correctness of any assessment or other matter decided, which has become final and conclusive, or seek for a review in respect thereof, and the assessee or the licensee shall not be entitled to any relief on such claim except the refund of tax or licence fees wrongly paid or paid in excess.
33-E. Interest on delayed refunds :-
(as it stood at the time of filing the TRCS)
(1) If the assessing authority or the licencing authority does not grant the refund within (six months) from the date on which the claim for refund is made by the assessee or licensee u/s 33-A, the State Government shall pay the assessee or licensee simple interest at (twelve percent) per annum on the amount directed to be refunded from the date immediately following the expiry of the period of six months aforesaid to the date of the order granting the refund.
EXPLANATION :- The delay in granting the refund within the period of (Six months) aforesaid is attributable to the assessee or licensee, whether wholly or in part, the period of the delay attributable to him shall be excluded from the period for which interest is payable.
(2) Where any question arises as to the period to be excluded for the purpose of calculation of interest under the provisions of this section, such question shall be determined by the Commissioner of Commercial Taxes whose decision shall be final.
33-F. Interest on refund where no claim need be made :-
(1) Where a refund is due to the assessee or licensee in pursuance of an order referred to in Section 33-B and the assessing or the licensing authority does not grant the refund within a period of Six months from the date of such order, the State Government shall pay to the assessee or the licensee simple interest at twelve percent per annum on the amount of refund due from the date immediately following the expiry of the period of six months aforesaid to the date on which the refund is granted.
(2) Where the refund is withheld under the provisions of Section 33-C, the State Government shall pay interest at the aforesaid rate on the amount of the refund ultimately determined to be due as a result of the appeal or further proceeding for the period commencing after the expiry of six months from the date of the order referred to in Section 33C to the date the refund is granted.
The Special Government Pleader for Commercial Taxes contended that the respondents/assessees/dealers were not entitled to interest @ 12% on the excess tax collected found refundable/adjustable, that only the petitioners in the batch of cases decided by the Supreme Court in Sri Krishna Enterprises''s case (1 supra) were entitled to interest at such rate and the respondents, not being parties in the Supreme Court, cannot be granted the said relief. It is also contended that the assessments relate to the period 1983-85 and had been completed long ago. Statutory remedies of appeal etc., have been availed and where the issue is alive, relief on the lines indicated by the Supreme Court judgment has to be given as per the memo No. 16454/CT/II/1/90-8 dated 18.3.1992 and in other cases where no appeals had been filed or appeals filed had been rejected, the issue not being alive, there cannot be a re-opening of the assessment, grant of refund and interest. Reliance was also placed on Section 33-E of the Act which dealt with interest on delayed refunds. It was contended that it provides for payment of interest if the assessing authority does not grant the refund within six months from the date on which the claim for refund is made by the assessee, that such claim is to be made under Rule 44-A in Form XXIII u/s 33-A, that filing of such claim petition in Form XXIII is a condition precedent and if the said condition is not satisfied, the assessee is not entitled to grant of interest. As the assessees had not filed such claim petitions in Form XXIII, it is contended by the State, that they are not entitled to interest on refund. It is also contended that the Revisional authorities in 18 of the cases decided by the Tribunal (i.e., TRCs. 185/2001, 186/2001, 188/2001, 190/2001, 192/2001, 193/2001, 194/2001, 202/2001, 207/2001, 208/2001, 220/2001, 222/2001, 225/2001, 226/2001, 230/2001, 260/2001, 114/2002, 241/2003) have entertained and awarded interest even though the orders of the assessing authorities are not prejudicial to the Revenue, that such Revisions ought not to have been entertained, and even if any relief is granted to the respondents therein, they cannot be treated as "proceedings under the Act", that therefore S. 33-B/S. 33-F of the Act do not apply (without admitting that they apply at all), that the State has accepted as far as refund is concerned but it has no further liability to pay interest in those cases.
Sri M.V.J.K. Kumar, learned counsel for the respondents however, supports the orders of the Tribunal and contends that the respondents are entitled to interest @ 12% per annum as directed by the Supreme Court in Sri Krishna Enterprises''s case (1 supra), that the respondents are similarly situated like the petitioners before the Supreme Court in the said case and that the State cannot discriminate between the petitioners who approached the Supreme Court in the said case and the respondents herein who did not. He also relied upon Article 265 of the Constitution of India and contended that the State could not have levied or collected the tax on supply of food and soft drinks (prior to 46th Amendment to the Constitution of India and the amendments to the A.P. General Sales Tax Act, 1957 (introducing Section 5-C by Act 18/85 with retrospective effect from 2.2.1983)) and the collection of tax was without the authority of law and therefore the State is bound to refund the tax illegally collected by it with interest for the delay in refunding the same.
We have considered the respective submissions.
In these cases, the State has admitted that refunds have already been issued to the assessees. The State is only contesting the payment of interest @ 12% per annum to the assessees on the amounts refunded.
We are of the view that the Sales Tax Appellate Tribunal erred in holding that the State is liable to pay interest on the refund of tax in all cases because of the order of the Supreme Court in Sri Krishna Enterprises''s case (1 supra). In taking such a view, the said Tribunal has not taken note of the provisions of the Act dealing with refunds and payment of interest on the refunds contained in Section 33 to Section 33-F. Therefore the Tribunal''s view to this extent is erroneous.
First we will deal with the TRCs in which interest on refunds were granted not by the Revisional authorities but by appellate authorities under the Act i.e. the Appellate Deputy Commissioners (i.e., TRCs. 185/2001, 186/2001, 188/2001, 190/2001, 192/2001, 193/2001, 194/2001, 202/2001, 207/2001, 208/2001, 220/2001, 222/2001, 225/2001, 226/2001, 230/2001, 260/2001, 114/2002, 241/2003). u/s 33-B, where as a result of any order passed in appeal or other proceeding under the Act, refund of any amount becomes due to an assessee, the assessing authority is bound to refund the same without the assessee having to make any claim in that behalf, or adjust or apply, such amount as provided in Section 33 subject to the dealer proving to the satisfaction of the assessing authority that the tax has not been collected by him from the purchaser as provided in Section 33-BB. Section 33F provides that where a refund is due to the assessee in pursuance of an order referred to in Section 33-B and the assessing authority does not grant the refund within a period of six months from the date of such order, the State Government should pay to the assessee interest @ 12% per annum on the amount of refund from the date immediately following the expiry of the period of six months aforesaid to the date on which the refund is granted. In view of the above provisions, we are of the view that grant of interest on refund of tax by the Appellate Deputy Commissioners was valid in view of Section 33-B read with Section 33-F of the Act, but such interest should have been granted only from the date immediately following the expiry of the period of six months from the date of order of Appellate Deputy Commissioners granting refund to the date on which the refund is granted as mandated in S. 33F.
We are also of the view that the Revenue is not correct in invoking Section 33-E of the Act as the said provision would apply only if the assessing authority did not grant refund. The said provision would not apply where a refund is due to an assessee pursuant to an order passed in appeal or other proceeding under the Act. In the latter case, Section 33-F alone would apply.
The contention of the Revenue that there should be a claim for refund u/s 33-A read with Rule 44 AA in Form XXIII and making of such claim is a condition precedent for grant of interest on the refund is also not tenable. Where the refund is pursuant to or as a result of any order passed in appeal or other proceeding under the Act, the assessee acquires u/s 33-B, a right to refund of such amount without the assessee having to make any claim in that behalf, or adjust or apply, such amount as provided in Section 33. So in situations governed by Section 33-B, it is not necessary for an assessee to make a claim for refund in order to get it. Consequently, u/s 33F, if the assessee is entitled to refund pursuant to an order referred to in Section 33-B, then, the State is liable to pay interest @ 12% per annum on the amount of refund due from the date immediately following the expiry of the period of six months from the date of such order to the date on which the refund is granted even if the assessee had not made any claim for refund u/s 33-A.
The principles of res judicata or estoppel do not apply in these cases and the mere fact that the assessees have not claimed interest either originally or subsequently in appellate proceedings would not preclude them from claiming it as Section 33-F gives them a right to get interest on the refund.
We next deal with the second category of cases (18 cases mentioned above) where refund was granted by the Revisional authorities exercising powers u/s. 20of the Act. Sri M.V.J.K. Kumar, learned counsel for the respondents relied on the decision of the Full Bench of this Court in State of Andhra Pradesh Vs. Sri Venkata Rama Lingeshwara Rice Mill and Others, and contended that the said decision supports his contention that revisional powers u/s 20 of the Act can be exercised in favour of assessee even after the expiry of limitation for filing the appeal and that before 1.7.1985, Section 20(1) permitted suo motu revision by the Commissioner "for the purpose of satisfying itself as to the legality or propriety of such order or as to the regularity of such proceeding" and that only w.e.f. 1.7.1985, Section 20 was amended and the powers of revision were restricted to revise orders "prejudicial to the interest of revenue". This argument is not tenable because admittedly the revision petitions were filed after 1.7.1985 when the amended provision came into force and therefore the said decision which interpreted Section 20 before the amendment has no application to the facts of these cases. In our view, the exercise by the Revisional authorities in these 18 cases of powers u/s. 20 of the Act, where the orders of the assessing authorities denying interest to the respondents were challenged by the respondents, is without jurisdiction and as such proceedings before the Revisional authorities cannot be construed as "proceedings under the Act" to whom Section 33-B or Section 33-F would apply. So in these 18 TRCs., arising out of orders passed by the Sales Tax Tribunal where revisional authorities granted interest (i.e., TRCs. 185/2001, 186/2001, 188/2001, 190/2001, 192/2001, 193/2001, 194/2001, 202/2001, 207/2001, 208/2001, 220/2001, 222/2001, 225/2001, 226/2001, 230/2001, 260/2001, 114/2002, 241/2003), the assessees are not entitled to interest even u/s 33-F of the Act. For the above reasons, the TRC Nos. 183/2001, 184/2001, 189/2001, 203/2001, 204/2001, 206/2001, 229/2001, 237/2001, 117/2002 and 158/2002 are partly allowed restricting the interest payable by the State to the respondents therein to the period of six months from the date of order of the Appellate Deputy Commissioners granting refund to the date on which the refund is granted. TRCs. 185/2001, 186/2001, 188/2001, 190/2001, 192/2001, 193/2001, 194/2001, 202/2001, 207/2001, 208/2001, 220/2001, 222/2001, 225/2001, 226/2001, 230/2001, 260/2001, 114/2002, 241/2003 are allowed. No costs.