Karnataka High Court
M/S Hcc-Sel (Jv) vs The Deputy Comissioner Of Commercial ... on 7 September, 2010
Author: Anand Byrareddy
Bench: Anand Byrareddy
:3' --'I'I~1E BRANCH MANAGER,
IN THE HIGH COURT OF KARNATAKA
CIRCUIT BENCH AT GULBARGA
DATED TI-IIS THE 07TH DAY OF SEP'i'EMBER:.I""
BEFORE T,' 'V21
THE HON'BLE MR. JUSTICE
WRIT PETITION NOS.80619~§0O2(I'0F I
BETWEEN
1. M/S HCC-SEL(Jv}._'. _ _
mp BY ITS AUTHORISED_SViEC{NA'17C3RY~ _
SRIP.M.GANATRA " j
PROJECT OFFICE ::"MA'1'RU C.HAYA"«._
fI.NO.36,;B}5§H,I1\ID CANESrw1"vNU-RSING HOME,
GANES1---i '1*-IAGAR,'OLD-.:.EWARGI ROAD.
OU1,,BARCA*_,
_ 1111 = ...PETITIONER
[BY SHRI R.V.PRASAD, _Mx.S.vASAN A/S, ADVS]
AND . _ I . _ _ .,
1. THE DOE£>U'r¥,COi\i1SSiONER OF COMMERCIAL TAXES
.. .iASSESSMENTS--11}
,_ « ..... ..'
~ =I\¥AMED AS THE DEPUTY COMMISSIONER
._ .11OEC'O:\/MERCLAL TAXES ( TRANSITION}
A 'CULEARGA
'IHI5);.ASSISTAN'I' COMMISSIONER OF COMMERCIAL
n TAKES, VI CIRCLE, BANGALORE
KARUR VYSYA BANK LTD.,
NO.13, SESHA SADAN
2. The facts briefly narrated are as iotlows:
The petitioner which is known as the Hindustan
Construction Company, is a Company registered tinder
the Companies Act. 1956 and had entered into.
Venture agreement with one M/s.Sadbha_\[__Engineerihg'
Limited {hereinafter referred to as
which is a public limited Co'm4pany;._ar:d togetherA'as:'; an
entity, had taken out registration under provisions
of the Karnataka "(hereinafter
referred to as the_'KST was engaged
in the the nature of
building road.sf.:' .
' registered under the
provisioiisiithei borne on the file of the first
under.....the KST Act. The petitioner was
g'atiV?a1'dAe'diaccontract of building State Highways by
of Karhataka and was a dealer
d"~..«.._"V..registered under Section 10(1) of the KST Act. The third
R'-'w<(¢'o">u4"
petition, disposed of the petition with an observation
that the notice issued by the Department stood
and it was open for the assessing authorityto ~
fresh notice under Section 14 of the it
consequently, the amounts récoxferetd ttwerep
refunded. That order "the " V
respondents herein avnd..Vhas'..a'tttained_finaididtys Pursuant
to the disposal of the -petitioner had consistentiy for refu'nd~«.ofd»dth.eV "aijnount in terms of the order. V T here.gfVter,_.it:jtra1asdpires, that certain appeals were pending the firsthappeiiate authority in the case .""o.f 'Thetppetitionwer requested the first respondent to Rs.3l,64,497/-- towards tax payable under ,.__the,u«hprovisions of the Act in respect of the .Tas;s_.essrnent year 2002~03 out of the amount that were it refunded to the petitioner. By another letter "dated 02.08.2006, the first respondent was requested to (3 adjust a further sum of Rs.i,39,4~9,3'78/- towards 50% of the disputed taxes payable by SE}, for the assessment year 2003-04 and requested for issuance of the refund Voucher for the balance amount. Acting letters. the first respondent is said to have endorsement dated 03.08.2006 in.formin,g"the::lpetitionerp ll' that a sum of Rs.1,75,48,38?/iwasliadjnstedl:
the tax arrears of Voucher dated 02.08.2000"Rs,:i_,:%irl,45,500/~. An advice of 31.08.2006 was also issuedfllltoy Bank of Hyderabad, Gulbarégati payment order in Form No.24 for countersigned by the Joint ,,»CiQIxnmis'sioner of Commercial Taxes [Intelligence and A 'Trajnsitio:n), {E1-;~..l;:l:)arga Division. since the appeals filed were allowed in alnvdlthe taxes payable by SEL being re--determined, petitioner was entitled to refund of the amounts beiated refund is Concerned, but inspite of repeated requests thereafter made by the petitioner, the respondents did not choose to pay interest amounts that were retained. How€V_€'1i. ~ endorsement dated 24.04.2008,_,..the' informed the petitioner that the lqueistiovn of the refund did not arise, siriQé"*~no interest was,'p'ayab1e "
under Section 13--~A of ,-the "ittis 'the..peti§tioner's case that the said without assigning any for interest and ~.further letter dated
12. 12..fZ'OO8'; that the present Iletitioriis f .
The 1Vearnedf"v_»C3Vo*{£1Vnsei for the petitioner, while
2 f,1aidf.ii'a'i,ing"~-on theseveral grounds on which the present would submit that the amounts haVi,ng be»e:r;1:'..directed to be refunded, was not in terms of Z""«__vV"Seeti0n-I13 of the KST Act and the authorities citing the letter of Section 13A t.o hold that. the petitioner was not entitled to claim interest., is therefore not justified_._._ The refund to be made is relatable to the order this Court holding that recovery from the petitioner was not justified and:-thereforle thle"lp]etitio'ne'1:g was entitled to immediate refundi__of_fthe anfl.o"un«t." amounts being retained for"-geonsiderablefjperiod'. has resulted in the revenue while depriving they fhe amounts of money, in its business in the elnabled the petitioner to earn substantial. out of the same. The learned Co"ur_isel,'.'wo'uld'" therefore seek to justify the for interest vvhieh is being unjustly denied by the
-..resepo11.dentsl.V"e- . V V the Government Pleader would seek to jlusti-fy the action of the petitioner and would submit
-that the only legal provision, under which interest could E0 be claimed is under Section 13 of the KST Act and in the instant case, having regard to the admitted, that the petitioner himself had respondents to adjust certain»~~arnou_'nts""that" dweree it legitimately due to the Revenueithnel 'cllailrn on the entire amount as directed .t__his_lCou~rt"ear1ier. i' may not stand to reason and.'lithe'-~petitioner»'claiming interest on that ground any provision of law, which as a matter of right and the action of the to file detailed statement of lobjleetions this regard.
5. Giiventhe abuveffacts and circumstances of the cas.e.§,g as rightly.flp_ointed out by the Counsel for the pet1't.ion_er.=th'e__ amounts recovered and directed to be refunded -iverelnot by recourse to any determination of such being liable to be paid by the petitioner A the usual course, by reference to the provisions of the Instruments Act, 1881 under Section 80 thereof the claim for interest is justified. Especially for a business house such as the petitioner, the flow of funds isycrucial and the State seeking to withhold the y an express direction by a Court, would--.,.d'§g:pr*iV:e.. tine petitioner of the benefit of thelamoney":.}{g5:sta;3.l which has had the benefit of same 'liable to pay interest for the delay
7. quantum of interest is bletitioner would even be justified--.in«--clain1ing._lli1i.terest over l2% on the amount, having regard_:Vto..the"'.fact that the amount was held by llV."-the*~reve'nu'e, andllvnlotl by a private party, it would be . reasonable interest, in the opinion of this Court, .avvarded. Hence, to balance equities, it is J'a,pp'roi)'riate that the respondents be directed to refund the aniount, Within a period of four Weeks, with interest the rate of 8% on Rs.3,19,93,887/M from 01.04.2005 upto 20.06.2006 and on the remaining amount of Rs.1.01,07.758/-- at the rate of 8% from upto 11.06.2007. If the respondents payment of interest beyond four weeks of, Ru receipt of a copy of this order as'°'dife_eted tbytt-hvis. the respondents shall be 1iab}e~._t0 pay on 0' the above amounts upto the'..d'ate_:'p.ayment;~A 3Unee JT/--