Jharkhand High Court
M/S Ws Retail Services Private Limited vs The State Of Jharkhand Through The ... on 12 April, 2022
Author: Aparesh Kumar Singh
Bench: Aparesh Kumar Singh, Deepak Roshan
IN THE HIGH COURT OF JHARKHAND AT RANCHI
W.P (T) No. 5139 of 2021
M/s WS Retail Services Private Limited --- --- Petitioner
Versus
1. The State of Jharkhand through the Secretary, Finance Department,
Ranchi, Jharkhand
2. The Commissioner of Commercial Taxes, Ranchi, Jharkhand
3. Joint Commissioner of State Tax (Admin), Ranchi Division, Ranchi,
Jharkhand --- --- Respondents
With
W.P (T) No. 5188 of 2021
M/s WS Retail Services Private Limited --- --- Petitioner
Versus
1. The State of Jharkhand through the Secretary, Finance Department, Ranchi
2. The Commissioner of Commercial Taxes, Ranchi, Jharkhand
3. Joint Commissioner of Sales Tax (Admin), Jamshedpur Division,
Jamshedpur, Jharkhand --- --- Respondents
---
CORAM: Hon'ble Mr. Justice Aparesh Kumar Singh Hon'ble Mr. Justice Deepak Roshan
---
For the Petitioner: M/s Kishore Kunal, Sumit Khadaria, Nitin Kr. Pasari, Sidhi Jalan , Advocates For the Respondents: Mr. Salona Mittal, A.C to G.A.-I
----
06 / 12.04.2022 Both these Writ Petitions relate to a claim of refund of Rs. 3,62,11,470/-
and Rs. 2,80,13,879/- respectively for Financial Years 2014-15 and 2015-16 in relation to jurisdictional division Ranchi Division and Jamshedpur Division respectively. However, learned counsel for the petitioner does not press the challenge to the findings relating to the order of penalty under section 72(3) of JVAT Act contained in Annexure-2 in W.P (T) No. 5188/2021.
2. The claim of refund made by the Petitioner to the extent indicated hereinabove was declined by the Joint Commissioner of State Tax (Admin.) of both the divisions by orders dated 01.08.2017 and 23.01.2018 respectively (Annexure - 2 in both the Writ Petitions and impugned herein), inter alia on the ground that there exists no provision under the Jharkhand Value Added Tax Act, 2006 ("JVAT Act") for refund to non-registered dealers and that the Petitioner has itself paid the amounts as admitted tax. The learned Commercial Taxes Tribunal in its orders dated 30.8.2019 (Annexure - 1 in both the Writ Petitions) has observed that a revision petition against the order of JCCT (Admin.) is not maintainable. However, it has also observed that no returns for the assessment year in question have been brought on record by the Petitioner.
2.3. Petitioner being aggrieved by the orders at Annexures 1 and 2, has approached this Court for quashing of the orders and also for a declaration that the Petitioner is entitled to seek refund despite being unregistered under the provisions of the JVAT Act.
4. Learned counsel for the Petitioner Mr. Kishore Kunal submits that the present cases are identical to the case of the same petitioner i.e. W.P (T) No. 2429 of 2018 relating to Dhanbad Division which was decided by this Court in its favour by order dated 09.02.2021. Therefore, the points of law and fact being same, are being reiterated hereinafter.
Petitioner is engaged in the business of selling goods through the portal, www.flipkart.com to end customers for their personal use. Petitioner is not registered under the JVAT Act. Petitioner has not been assessed to tax under the JVAT Act. No demand notice was raised against the petitioner. Petitioner has paid Central Sales Tax to the tune of Rs. 3,61,43,579/- and Rs. 2,78,76,024/- respectively in the State of origin on goods being transported by it to Ranchi and Jamshedpur Divisions to be delivered to Customers. This amount of Rs. 3,62,11,470/- and Rs. 2,80,13,879/- respectively was collected on the very same goods. There was a single transaction of sale on which CST had been paid in the State where the movement of the goods commenced. During the relevant period, apart from the business of sale of goods using the online portal, the petitioner was also providing logistics services to the various sellers, who undertook sale through the said online portal. Since the amount was deposited without any tax liability or assessment and that no sale transaction took place within the State of Jharkhand, petitioner filed an application for refund under Section 52 of the Act. Petitioner had, in fact, deposited those amounts for continuity in business and to avoid coercive action. Learned Counsel for the petitioner submits that refund has been refused on the ground that petitioner is not a registered dealer under JVAT Act and there is no provision under the Act to make such a refund. Learned counsel for the petitioner further submits that retention of the amount without any liability of tax would be in violation of Article 265 of the Constitution of India. It is submitted that in such circumstances, a mandamus can be issued for grant of refund of the amounts collected and retained by the respondent in violation of Article 265 of the Constitution of India. It is submitted that the entire deposit was ad-hoc in nature. He has referred to the certificate granted by the Chartered Accountant at page 110 and 103 3. respectively to the effect that no sales originated from the State of Jharkhand between April, 2014 to August, 2015. It is stated at para 39 of the writ petition that such amounts were not collected from the ultimate customers. Therefore, question of unjust enrichment does not arise. He has relied on the following judgments in support of the proposition that amounts collected without authority of law are liable to be refunded -
i. (1989) 4 SCC 640, paras-12 & 13]: HMM Ltd. Vs. Administrator, Bangalore City ii. (1986) 3 SCC 50]: Commissioner of Sales Tax, U.P. Vs. M/s. Auriaya Chamber of Commerce, Allahabad iii. [2008 (221) ELT 336 (Del.), paras-13 & 16]: Hind Agro Industries Ltd. Vs. Commissioner of Customs iv. , [2019 (368) ELT 387 (Kar.)]: Arvind Lifestyle Brands Ltd. Vs. Under Secretary, Technology Development Board & Ors.
Learned counsel for the petitioner has further placed reliance upon the case of Suresh Chandra Bose Vs. State of W.B [AIR 1976 Cal 110, paragraph-6] in support of the proposition that under Section 52 of JVAT Act, the refund can be filed by any person who is covered within the definition of "Dealer" and the person necessarily does not have to be registered under the Act for seeking refund which has been collected in excess of the amounts due under the Act.
5. Learned Counsel for the Petitioner further submits that in a similar manner, the refund application filed by the Petitioner towards amounts collected by Dhanbad Circle was rejected by the Jharkhand Commercial Tax Department on the ground that application for refund was not maintainable. The learned Tribunal vide order dated 31.10.2017 had also rejected the Revision Petition. Against the said rejection order, the Petitioner had preferred a writ petition W. P. (T) No. 2429 of 2018 before this Hon'ble High Court. Vide Order dated 09.02.2021 this Hon'ble Court was pleased to allow the writ petition and set aside the order of rejection of the order of Tribunal. The Hon'ble Court remanded the matter to learned Joint Commissioner for considering the claim of refund of the Petitioner. Pursuant to the aforementioned directions of the Hon'ble High Court, the learned Joint Commissioner State Tax (Dhanbad) Division, vide Order No.321, dated 25.03.2021, allowed the refund of the petitioner for the period 2014-15 and 2015-16 (Annexure-10). Learned counsel for the Petitioner submits that vide 4. order dated 9.2.2021, this Hon'ble Court had held that any assessment proceedings would be impermissible for the period 2014-15 in light of Section 39 of the JVAT Act which prohibits assessment under Sections 37 or 38 after expiry of five years from the end of the tax period to which the assessment relates. In the present case, no assessment can be carried out as the period of limitation for both years, i.e., 2014-15 and 2015-16 have expired.
6. Based on these submissions, learned counsel for the Petitioner has prayed for quashing of the impugned order and a direction for refund of the amount.
7. Learned counsel for the State Mr. Salona Mittal, A.C to G.A-1 referred to the stand taken in the counter affidavit of the Respondent Nos. 1 to 3 filed on 24.3.2022 and 22.3.2022 respectively. In both the counter affidavits, two fold stand has been taken by the Respondents. Firstly, the transaction of the Petitioner falls within the category of intra state sales. A perusal of used Form JVAT 503 would show that the petitioner has declared himself as consignee and received the goods in the terminating state i.e Jharkhand as consignee and thereafter delivered the goods to different customers in whose favour, bills have been raised. Reliance has been placed on the judgment of the Hon'ble Supreme Court in Balabhagas Hulaschand v. State of Orissa, [(1976) 2 SCC 44] to submit that the petitioner was liable to pay tax on the goods consigned and carried to the State of Jharkhand with the help of Form JVAT 503. Secondly, it has been urged that the liability to pay tax can be ascertained either by the State or by the petitioner himself / itself. It is not necessary on the part of the State to proceed against each and every tax-payer for registration, filing of returns and assessment. It is the duty of the tax-payer to ascertain his liability and approach the concerned department to get him registered under the provisions of the Act. In the instant case, it was within the knowledge of the petitioner that he is liable to pay tax. The conduct of the petitioner also shows that it had paid the tax against each and every consignment transported with the help of Form JVAT 503 on the basis of self- assessment. Merely because of non-registration and non-assessment, he /it cannot claim that his / its liability to pay tax is nil. In W.P.(T) No. 5139 of 2021, the Respondent relies on Annexure-A to the counter affidavit to state that the Petitioner had expressly authorized an employee for payment of tax. In W.P.(T) No. 5188 of 2021, the Respondent has stated that the fact that the Petitioner had paid the amount of penalty and tax in pursuance of the notice 5. under Section 70(5) without protest, is self speaking that Petitioner had accepted its liability.
8. In rejoinder, the counsel for the Petitioner submits that the Respondents have sought to re-agitate the issue pertaining to the interstate nature of transactions of the Petitioner in their counter affidavit. The fresh ground taken in the counter affidavit cannot be countenanced as they are in teeth of the principles laid down in Mohinder Singh Gill versus Election Commission, [(1978) 1 SCC 405, para 8]. The respondents cannot improve upon their grounds of rejection. Even otherwise, it is submitted that VAT could not have been collected in the transactions on which CST already stood charged by the State of Origin in terms of Section 3(a) read with Section 9 of the CST Act. He has relied on the following judgments in Petitioner's own case wherein it was held that transactions of selling goods to individual consumers by the Petitioner is one of inter-state nature and the 'situs' of sale is wholly irrelevant i. [2016] 76 taxmann.com 367 (Madras), para 23 onwards]: WS Retail Services Private Limited Vs. Union of India ii. [2015] 62 taxmann.com 387 (Kerala) para 10]: Flipkart Internet (P.) Ltd. Vs. State of Kerala iii. [2017 SCC OnLine P&H 2965]: WS Retail Services Private Limited Vs. Union of India He further submits that even in terms of admitted facts, there is no assessment or demand against the Petitioner and thus, appropriation of amounts collected without demand / assessment from the Petitioner are without the authority of law and in violation of Article 265 of the Constitution of India. Reliance is placed on Century Metal Recycling Pvt. Ltd. Vs. Union of India, reported in [2009 (234) ELT 234 (P&H), para 13[ followed in Concepts Global Impex Vs. Union of India, reported in [2019 (365) ELT 32 (P&H)]. He submits that the authority letter (Annexure-A of the Counter Affidavit in W.P.(T) No. 5139 of 2018) cannot be treated as acceptance of liability as tax cannot be paid in absence of statutory mandate.
9. We have considered the submissions of learned counsel for the parties in the factual canvass of the case noted above. It is pertinent to mention at this stage that this Court on similar facts in the petitioner's own case, has passed an order dated 09.02.2021 in W.P.(T) No. 2429 of 2018. The operative portion of the said order is reproduced herein below:
6.7. We have considered the submission of learned counsel for the parties and taken note of the material pleadings on records as relied upon by them. We have also gone through the decisions cited by learned counsel for the petitioner. It is the case of the petitioner, undisputed by the respondent that petitioner is not a registered dealer under JVAT Act, 2005 nor has been assessed to tax under the Act. No demand notices were raised against the petitioner as such to the effect that any tax is due against him.
Petitioner claims to have made deposit of Rs. 61,74, 899/- in order to ensure continuity of business and to avoid coercive action without any demand of tax since the goods transported by the petitioner were already excisable to Central Sales Tax to the tune of Rs. 58,05,157/- which were paid in the State of Origin. No sale took place in the State of Jharkhand within that period. The principles regarding maintainability of writ petition seeking refund in case the levy is unauthorized or without jurisdiction or is unconstitutional is well settled by the decisions of the Apex Court. In the case of HMM Ltd. (supra), the Apex Court has held that realization of tax or money without the authority of law is bad under Article 265 of the Constitution of India. It has further been held in the case of Arvind Lifestyle Brands Ltd. Vs. Under Secretary Technology Development Board & Ors., reported in 2019(368) ELT 387 (Kar.) relying upon the decision in the case of HMM Limited (Supra) that any amount paid by mistake or through ignorance of repeal Act deserves to be refunded as retention of such amount would be hit by Article 265 of the Constitution of India. In the case of the petitioner admittedly there has been no assessment of tax liability till date. The claim of refund has been denied on the plea that there is no provision under the JVAT Act since the petitioner is not a registered dealer and no assessment proceedings have been held. Under the Scheme of JVAT Act, assessment proceedings can be held against dealers, who have failed to get themselves registered. However, no assessment can be made under Sections 37 or 38 after expiry of 5 years from the end of the tax period, to which the assessment relates. On the face of the pleadings on record and the stand of the respondents brought through their counter affidavit, the rejection of claim for refund only on the ground that there is no provisions under the JVAT Act, 2005 for entertaining such a claim is not sustainable in law. Whether the contention of the petitioner that the entire sale transaction originated in a different State after payment of central sales tax to the tune of Rs. 58,05,157/- and there was no sale transaction originating within the State of Jharkhand for the respondent to retain the amount so deposited is a matter of verification upon assessment.
However, as it appears the transaction relates to the period December, 2014 to August, 2015. Any assessment proceedings in respect of transaction for the period December, 2014 till 31st March, 2015 would be impermissible in the light of Section 39 of the JVAT Act, 2005. However, it may be open for the respondent authorities to undertake such assessment for the period 1st April, 2015 till August, 2015 with the rider contained in Section 38 & 39 of the JVAT Act, 2005. We do not wish to observe any further in this regard. However, having regard to the facts and circumstances of the case and the discussions made hereinabove, the order of rejection of claim of refund by respondent no. 3 dated 1st September, 2016 (Annexure-4) and the order of learned Commercial Taxes Tribunal dated 31st October, 2017 (Annexure-
8) upholding the same cannot be sustained in the eye of law Accordingly, they are set aside. The matter is remitted to the 7. respondent no. 3, Joint Commissioner of Commercial Taxes (Admin), Ranchi to consider the claim of refund of the petitioner in accordance with law within a period of six weeks from today. Petitioner should appear before the respondent no. 3 on 15th February, 2021 with the relevant records. 9. The writ petition is allowed in the manner and to the extent indicated hereinabove. However, we make it clear that any observations made hereinabove, shall not prejudice the case of the parties while considering the claim of refund.
(Emphasis supplied)
10. Pursuant to such order, the Joint Commissioner of State Tax (Dhanbad Division) has passed an order dated 25.3.2021 (Annexure-10 in both Writ Petitions) holding that the assessment for the year 2014-15 has already become time barred. So far as the financial year 2015-16 is concerned, it has also held that there was nothing on record to suggest that the petitioner had undertaken any sale or purchase in the State of Jharkhand. The Joint Commissioner of State Tax (Dhanbad Division) has further held that since the incidence of tax does not fall on the petitioner under Section 8 of the JVAT Act, there was no question of applying Section 25 related to compulsory registration. Accordingly, there being no reason to carry out assessment against the petitioner under Section 38, proceedings were dropped and the question of unjust enrichment does not arise since during verification, it was clear that the amounts deposited in Dhanbad division were not recovered from the customers.
11. In the present case, the Respondent have tried to rely on certain new grounds such as the payment of admitted tax and the intra state nature of transactions. The Petitioner has replied to such contentions, as noted hereinabove. The same are not repeated herein since this Court vide its order dated 09.02.2021 passed in W.P.(T) No. 2429 of 2018 has already rendered its finding on identical issue. In the said judgment, it was left to the assessing authority to undertake assessment for the Financial Year 2015-16 since the limitation period was yet to expire, which was to expire on 31.3.2021, i.e., five years from the end of tax period 2015-16. Assessment in case of Financial Year 2014-15 was held to be impermissible.
12. It is undisputed that in the present case the limitation period for even Financial Year 2015-16 has also expired and no assessment has been carried out. As a corollary, no demand notice in terms of such assessment has been issued. Therefore, in the light of Section 39 of the JVAT Act, the limitation period having expired, assessment would be impermissible in 8. respect of Financial Years 2014-15 and 2015-16. It was open to the Respondent to conduct an assessment in terms of Section 38 of the JVAT Act and make good the stand it has taken in its counter affidavit as regards the intra-state nature of transactions. Having not done so, it cannot be allowed to take advantage of its own wrong. Moreover, the contention regarding admitted payment of tax paid on self-assessment basis is also untenable since Section 35(3) of the JVAT Act speaks of self-assessment and applies to only registered dealers. The payment made by the petitioner in the nature of an ad-hoc deposit could be retained only in case the liability to tax crystallized through an assessment proceeding resulting in an assessment order / demand order.
13. Having regard to the facts and circumstances of the case and discussions made herein above, and also the order dated 09.02.2021 passed on the same issue in the case of the same parties, the order of rejection of claim of refund dated 01.08.2017 (Annexure-2) passed by the Respondent No. 3 in W.P.(T) No. 5179/2021, order dated 23.01.2018 (Annexure-2) passed by Respondent No. 3 in W.P.(T) No. 5188/2021 and order dated 30.08.2019 (Annexure-1 in both the writ petitions) passed by the learned Commercial Taxes Tribunal, Jharkhand upholding the same, cannot be sustained in the eye of law. Accordingly, they are set aside, so far as it relates to the rejection of the claim of refund. Matter is remitted to the Respondent No. 3-Joint Commissioner of State Tax (Admin), Ranchi Division, Ranchi / Joint Commissioner of State Tax (Admin), Jamshedpur Division, Jamshedpur to consider the claim of refund of the petitioner in accordance with law within a period of six weeks from today. Petitioner has not pressed its challenge to the penalty under Section 72(3) of the JVAT Act as contained in Annexure-2 in W.P (T) No. 5188/2021, as taken note of in the opening paragraph of this judgment. Writ petitions are allowed in the manner and to the extent indicated hereinabove.
(Aparesh Kumar Singh, J) (Deepak Roshan, J) Ranjeet/