Allahabad High Court
M/S Birla Corporation Limited vs State Of U.P. And 3 Others on 16 November, 2021
Bench: Naheed Ara Moonis, Saumitra Dayal Singh
HIGH COURT OF JUDICATURE AT ALLAHABAD AFR Court No. - 21 Case :- WRIT TAX No. - 748 of 2020 Petitioner :- M/S Birla Corporation Limited Respondent :- State Of U.P. And 3 Others Counsel for Petitioner :- Sujeet Kumar,Chhaya Gupta Counsel for Respondent :- C.S.C. Hon'ble Naheed Ara Moonis,J.
Hon'ble Saumitra Dayal Singh,J.
1. Heard Shri Santosh Kumar Bagaria, learned Senior Advocate assisted by Shri Sujeet Kumar and Ms. Chhaya Gupta, learned counsel for the petitioner and Shri C.B. Tripathi, learned Special Counsel for the revenue.
2. Present petition has been filed to quash the communications dated 07.07.2020 and 11.08.2020 issued by the Deputy Commissioner, Commercial Tax, Sector 3, Prayagraj and for a further direction in the nature of Mandamus to refund Rs. 17,45,68,741/- along with interest at the rate of 15% from 04.07.2020.
3. In short, undisputedly, the aforesaid amount of refund was found due to the petitioner under the provisions of the U.P. Trade Tax Act, 1948 (hereinafter referred to as the "Erstwhile Act") for the A.Y. 2004-05 to 2007-08. Owing to legislative changes, that claim was made and considered under UP VAT Act, 2008 (hereinafter referred to as the "VAT Act"). The refund payment has been denied on a solitary ground of the entire amount Rs. 17,45,68,741/- adjusted against the dues of interest on Entry Tax claimed against the petitioner, being Rs. 18,10,01,347/- arising under the U.P. Tax on Entry of Goods into Local Areas Act, 2007 (hereinafter referred to as the "Entry Tax Act").
4. The core issue to be addressed is, whether by virtue of section 13(xv) of the Entry Tax Act read with section 40 of the VAT Act, the amount of refund under the VAT Act could be adjusted against the dues arising under the Entry Tax Act.
5. In brief, the petitioner set up a unit to manufacture cement using fly ash as a raw material. At the relevant time, on 18.06.1997, the Government of U.P. (in exercise of its power under section 5 of the Erstwhile Act), had issued a rebate notification granting rebate on payment of tax under the Erstwhile Act, to eligible units, for a period of ten years. Admittedly, the petitioner was granted that benefit for the period 14.12.1998 to 13.12.2008. Mid-way into that scheme, the said rebate notification came to be rescinded on 14.10.2004, by the State Government. Consequently, for the period 14.10.2004 to 13.12.2008, no rebate was allowed to the petitioner under the Erstwhile Act. Consequently, tax payments were made.
6. The notification dated 14.10.2004 rescinding the rebate notification dated 18.06.1997 was challenged by the petitioner and others before this Court. First, writ petition M/s Jai Prakash Associates Ltd. vs. State of U.P. and Another 2010 UPTC 757, came to be decided by the judgment dated 29.03.2010. Paragraph 125 of the said decision reads as under:-
"125. The writ petition is allowed in part to the extent petitioner's entitlement for tax exemption for the period available under the original notification dated 27th February, 1998. Accordingly, a writ in the nature of mandamus is issued directing the opposite parties to provide tax exemption to the petitioner industry from the date of production for the period of entitlement under original notification dated 27th February, 1998."
7. On 16.04.2010, the petition filed by the present petitioner being Writ Petition (Misc. Bench) No. 6176 of 2004, M/s Birla Corporation Ltd. vs. State of U.P and others came to be decided by the order dated 16.04.2020 on the following terms:-
"Keeping in view the fact that the controversy has been set at rest, present writ petitions too are decided finally in terms of the judgment and order dated 29.3.2010, passed in writ petition No. 5861(M/B) of 2010.
No order as to costs."
8. The above judgments, were carried in appeal by the revenue, to the Supreme Court. Vide judgment dated 12.11.2019, in State of Uttar Pradesh and Another vs. Birla Corporation Ltd. (2019) SCC OnLine SC 1569, the Supreme Court dismissed the revenue's appeal with certain observations. Relevant to our issue, paragraph nos. 34 and 36 of the said decisions read as below:-
"34. A priori, the respondents and similarly placed persons would be entitled to rebate for the relevant period prescribed in the notification dated 27th February, 1998 which would continue to remain in vogue until the expiry of the specified period, namely, ten years. In the case of BCL up to 13 th December, 2008 and in the case of JPAL up to 17th September, 2014 respectively. The amount of rebate, however, would depend on the verification of their refund claim pending before the concerned authorities and would be subject to just exceptions including the principle of unjust enrichment. The respondents should be able to substantiate that the amount claimed by them has not been passed on to their consumers. Only then, they would be entitled for refund. The competent authority may verify the claim for refund of each of the respondent(s) in accordance with law and pass appropriate orders, including about the interest for the relevant period.
35. ................................
36. In view of the above, these appeals must fail. Hence, the same are dismissed with observations. There shall be no order as to costs. All pending applications are also disposed of."
(emphasis supplied)
9. As was noted in the order of the Supreme Court, upon the petitioner's writ petition being allowed by this Court, the petitioner had filed applications dated 20.11.2010 claiming refund Rs. 17,90,61,418/- being the total amount of rebate denied to the petitioner during pendency of its writ petition before this Court, for different Assessment Years, during the period 14.10.2004 to 31.12.2007. It may be noted, no refund was claimed for the period beyond 01.01.2008 when the VAT Act was enforced.
10. Separate orders were passed by the respondent no. 4 on the petitioner's applications claiming refund, all on 29.06.2020. Thus, instead of granting the refund of the amount claimed, the respondent-assessing authority of the petitioner only quantified the total amount of trade tax refundable at Rs. 17,45,68,741/- for A.Y.s 1998 (from 14.12.2008)-1999 to 2007-2008 (upto 31.12.2007). It is also undisputed, at that stage, the assessing authority of the petitioner found the petitioner had not passed on that liability (of disputed trade tax). Thus, neither the principle of unjust enrichment was found applicable nor any other ground was found existing to deprive the petitioner of the refund claimed. At the same time, the assessing authority found, no interest was payable to the petitioner on the delayed refund. Thereafter, on 07.07.2020, instead of paying out the refund, the assessment authority of the petitioner issued a further ex-parte communication to the petitioner informing adjustment of the entire amount of refund Rs. 17,45,68,741/- against the outstanding demand of dues of interest on Entry Tax Rs. 18,10,01,347/-, for the A.Ys. 2003-04 to 2009-10.
11. A similar communication giving full details of such adjustments made was issued to the petitioner on 11.08.2020. In such circumstances, the petitioner again wrote to its assessing authority on 31.08.2020 stating, no amount of tax was due against him either under the erstwhile Act or the VAT Act or the Central Sales Tax Act, 1956 (hereinafter referred to as the "Central Act"). It reiterated its demand for payment of refund due. In the present writ petition in paragraph 3, it has been specifically stated, there is no amount of tax outstanding or due against the petitioner under the provisions of the Erstwhile Act or the VAT Act or the Central Act. In reply thereto in paragraph 29 of the counter affidavit, only this much has been stated, on the date of the refund order dated 29.06.2020 being passed, interest on Entry Tax Rs. 18,10,01,347/- was outstanding against the petitioner for the A.Ys. 2003-04 to 2009-10.
12. Referring to the provisions of Section 29 of the Erstwhile Act and Section 40 of the VAT Act read with Section 2(k) thereof, it has been submitted, the VAT Act only authorizes adjustment of an amount of refund due against any outstanding amount of tax either under (i) the Erstwhile Act or (ii) the VAT Act or (iii) the Central Sales Tax Act. By virtue of Section 13(xv) of the Entry Tax Act, the provisions of Section 40 of the VAT Act have been incorporated in the Entry Tax Act on the principle, mutatis mutandis. Referring to the decision of the Supreme Court in Ashok Service Centre vs. State of Orissa (1983) 2 SCC 82 as followed by the Supreme Court in Mariyappa and others vs. State of Karnataka and others (1998) 3 SCC 276 and in Indian Oil Corporation Ltd. Vs. State of Uttar Pradesh and others (2019) 16 SCC 482, it has been urged - that principle applies with limitations inherently attached to it. Thus, a statutory law borrowed on the principle mutatis mutandis may be applied to the enactment to which it has been borrowed, with necessary changes only. That principle may not allow for a new provision or legal effect to be created, de hors the language of the borrowed provision of law-here section 40 of the VAT Act.
13. Thus, it has been submitted, read into the Entry Tax Act, section 40 of the VAT Act only provides, in case any amount is found refundable under the Entry Tax Act, the same may first be applied to any tax dues under (i) the Entry Tax Act (ii) U.P. Trade Tax Act (iii) Central Sales Tax Act. However, the amount refundable under the Entry Tax Act may not be applied or be adjusted against any tax due under the VAT Act. Since, in the present case, the amount is refundable not under the Entry Tax Act but under the VAT Act read with erstwhile Act, section 13(xv) of the Entry Tax Act read with section 40 of the VAT Act, would have no application. The authorities have wholly misconstrued the law and have illegally adjusted the refund due to the petitioner.
14. As to the decision of the Constitution-bench of the Supreme Court in Paresh Chand Chatterjee vs. The State of Assam and Ors. AIR 1962 SC 167, it has been submitted, rather than helping the case of the revenue, that decision only makes clear the proposition - the principle mutatis mutandis cannot introduce a completely new legislative provision, to the borrower-enactment as may not be found specifically existing in the parent enactment of which the borrowed provision is a part. Neither the Erstwhile Act nor the VAT Act provided for a scheme whereby an amount due by way of refund could be adjusted against dues of Entry Tax Act, such a provision of law cannot be imagined and thus created or introduced in the Entry Tax Act. In Paresh Chand (Supra), a question arose whether under Section 8(1) of the Assam Land (Requisition and Acquisition) Act, 1948, by use of words mutatis mutandis, any right existed or duty arose to value the land requisitioned under that enactment. Explaining the principle mutatis mutandis, it was held, once the provision of Land Acquisition Act, 1894 had been made applicable on a mutatis mutandis principle, to the provisions of the Assam Land (Requisition and Acquisition) Act, 1948 with respect to determination of compensation under that Act, clearly the word 'acquisition' used under the Land Acquisition Act, 1894 would have to be read to include within its ambit and sphere the word 'requisition' used under the Assam Land (Requisition and Acquisition) Act, 1948. That due alteration of detail or that appropriate modification was necessary to give life to the borrowed provision of law, in the context of the borrower-enactment.
15. Opposing the petition, learned Special Counsel for the revenue has first fairly brought on record a decision of the division bench of this Court in M/s Eastern Spinning and Textiles Mills vs. State of U.P. 2010 TLD 41. Though that decision records a conclusion in favour of the petitioner, at the same time, the decision in that case did not adjudicate the issue arising herein. The said direction was issued without reference to the provision of Section 13(xv) of the Entry Tax Act.
16. Next, heavy reliance has been placed on the language of the proviso to Section 40 of the VAT Act applied mutatis mutandis to the provisions of Entry Tax Act, by virtue of Section 13(xv) of the Entry Tax Act. Relying on the five-Judge Constitution Bench decision of the Supreme Court in the case of Paresh Chand Chatterjee vs. The State of Assam and Ors. (supra), it has been submitted, appropriate modifications to the provisions of section 40 of the VAT Act are necessary and due alternation of details must be made to that provision of law in the context of the Entry Tax Act. It would necessarily mean, the proviso to section 40(1) of the VAT Act refers to any amount that may be refundable be first applied to satisfy an outstanding demand of tax under the Entry Tax Act or under the Central Act or the VAT Act. Unless that full effect is given to the proviso in the manner suggested by the learned counsel for the revenue, that plain effect of the borrowed provision would remain from being enforced.
17. Thus, according to learned counsel for the revenue, the proviso as to Section 40 of the VAT Act, as applied to the provisions of Entry Tax Act has to be given free play to carry out the object of that (latter) Act. To that end, he would also rely on a three-judge bench decision of the Supreme Court in Siddhartha Viyas and another vs. Ravi Nath Misra and others (2015) 2 SCC 701. Heavy reliance has been placed to the ratio contained in that decision to the effect-proviso cannot be read to nullify or not to set at naught the real object of the main enactment. Insofar as, it is an object of the Entry Tax Act to seek recovery of the admitted/assessed amount of Entry Tax, the same cannot be defeated by giving a restricted meaning to the proviso to include therein, the outstanding demands under the VAT Act or the Central Sales Tax Act but to exclude the demand under the Entry Tax Act. Thus, Shri Tripathi has also invoked the principle of purposive interpretation.
18. Having heard learned counsel for the parties and having perused the record, the controversy involved in the present case is neither to the entitlement of refund or its quantification. Insofar as the Erstwhile Act is concerned, the petitioner claims it became entitled to refund of Rs. 17,45,68,741/- by virtue of the decision of this Court in Writ Petition (Misc. Bench) No. 6176 of 2004 decided on 16.04.2010 as affirmed by the Supreme Court (on certain conditions) in State of U.P. vs. Birla Corporation Ltd. (Supra). That entitlement to refund was preserved and protected under UP VAT Act. To that effect, orders of refund have also been passed on 29.06.2020. Those have attained finality. As to the demand of Entry Tax Act, again there is no dispute that Entry Tax demands were raised for the A.Ys. 2003-04 to 2009-10. Though, those demands were later discharged, owing to the delay on part of the petitioner in discharging that liability, interest liability Rs. 18,10,01,347/- had arisen thereon.
19. Examined in that light, what survives for our consideration is whether the amount of refund due under the Erstwhile Act could be adjusted against the demand of interest on Entry Tax. Since no issue of competance of the proceedings for refund has been raised by either party, the provisions to which reference is necessary are-section 13(xv) of the Entry Tax Act and section 40 of the VAT Act. Section 13(xv) of the Entry Tax Act reads as below:-
Section 13. Applicability of certain provisions of the Uttar Pradesh Value Added Tax Act, 2008.
The following provisions of the Uttar Pradesh Value Added Tax Act, 2008 shall mutatis mutandis apply to all dealers and proceedings under this Act:-
(xv) Section 40 Refund and adjustment
20. Then, section 40(1) of the VAT Act reads as below:-
Section 40. Refund and adjustment-
(1) Subject to other provisions of this Act, the assessing authority shall in the manner prescribed, refund to the dealer an amount of tax, fee, or other dues paid in excess of the amount due from him under this Act.
PROVIDED that amount found to be refundable shall first be adjusted towards tax or any other amount outstanding against the dealer under this Act or under The Central Sales Tax Act, 1956 or under the erstwhile Act and only the balance if any shall be refunded.
21. Thus, the Entry Tax Act itself does not contain a separate provision for refund and adjustment. It borrows that provision from the VAT Act. Legislation by incorporation is a fairly common and well established legislative practice. Clearly, it is a rule of brevity in legislative action. Thereby the legislative directly borrows and applies a time-tested fully mature provision of law to a new/later enactment. In Ashok Service Centre (Supra) dealing with the expression mutatis mutandis it was held as under:-
"17. Section 3 (2) of the Act which makes the provisions of the principal Act mutatis mutandis applicable to the levy of additional tax is a part of the charging provision of the Act and it does not say that only those provisions of the Principal Act which relate to assessment and collection of tax will be applicable to the proceedings under the Act. Before considering what provisions of the Principal Act should be read as part of the Act, we have to understand the meaning of the expression 'mutatis mutandis'. Earl Jowitt's 'The Dictionary of English Law (1959)' defines 'mutatis mutandis' as 'with the necessary changes in points of detail'. Black's Law Dictionary (Revised 4th Edn. 1968) defines 'mutatis mutandis' as 'with the necessary changes in point of detail, meaning that matters or things are generally the same, but to be altered when necessary as to names, offices, and the like. Houseman v. Waterhouse. In Bouvier's Law Dictionary (3rd Revision, Vol. II), the expression 'mutatis mutandis' in defined as "[T]he necessary changes. This is a phrase of frequent practical occurrence, meaning that matters or things are generally the same, but to be altered when necessary, as to names, offices, and the like. Extension of an 'earlier Act mutatis mutandis to a later Act brings in the idea of adaptation, but so far only as it is necessary for the purpose, making a change without altering the essential nature of the thing changed, subject of course to express provisions made in the later Act. Section 3 (2) of the Act shows that the State Legislature intended not to depart substantially from the Principal Act except with regard in matters in respect of which express provision had been made in the Act. The assumption made by the High Court that the Act was an independent Act having nothing to do with the Principal Act is not correct. The Act only levied some extra sales tax in addition to what had been levied by the Principal Act. The nature of the taxes levied under the Act and under the Principal Act was the same and the Legislature expressly made the provisions of the Principal Act mutatis mutandis applicable to the levy under the Act. The additional sales tax was in the nature of a surcharge over and above what was due and payable by assessee under the Principal Act. The Act, though it had a long title, a short title and other usual features of every statute, could not be, considered as an independent statute. It had to be read together with the Principal Act to be effective. In the circumstances the conclusion reached by the High Court that the two Acts were independent of each other was wrong. We are of the view that it is necessary to read and to construe the two Acts together as if the two Acts are one, and while doing so to give effect to the provision, of the Act which is a later one in preference to the provisions of the Principal Act wherever the Act has manifested an intention to modify the Principal Act. The following Observations of Lord Simonds in Fendoch Investment Trust Co. v. Inland Revenue Commissioners(1) made in connection with the construction of certain fiscal statutes are relevant here."
"My Lords, I do not doubt that in construing the latest of a series of Acts dealing with a specific subject matter, particularly where all such Acts are to be read as one, great weight should be attached to any scheme which can be seen in clear outline and amendments in later Acts should if possible be construed consistently with that scheme".
(emphasis supplied)
22. That principle was then applied in Mariyappa and others vs. State of Karnataka and others (supra). It was again followed by later decision of the Supreme Court in IOCL vs State of U.P. And others (supra), wherein, in paragraphs 54 and 57 of the decision, reached in the context of Entry Tax Act.
54. What is the nature of the provision of Section 33 of the VAT Act, 2008 which has been made applicable by virtue of Section 13 of the 2007 Act is the question to be answered. Section 13 "mutatis mutandis" applies certain provisions of the VAT Act, 2008 as mentioned in Section 13. The words "mutatis mutandis" came to be considered in Ashok Service Centre v. State of Orissa. In the aforesaid case, this Court had occasion to consider the provisions of the Orissa Additional Sales Tax Act, 1975. Section 2(2) of which provision mutatis mutandis applies the provisions of the Orissa Sales Tax Act, 1947.
57. Thus, application of the provisions of the VAT Act, 2008 is provided by Section 13 of the 2007 Act with certain changes in points of details. Section 33 of the VAT Act, 2008 which has been mentioned to apply under Section 13 has to be applied with respect to payment and recovery of tax. Thus, the payment of interest which is contemplated under Section 33 on the amount of tax has to be applied with regard to the payment of entry tax and the interest thereon. Even if provision of Section 33 of the VAT Act, 2008 to be treated as machinery provision which is to be applied by virtue of Section 13 of the 2007 Act, the machinery provision has to be interpreted in a manner so as to make the liability effective and treated to be substantive law."
23. In borrowing a provision, some change of language or meaning to terms and phrases used in the statutory provision being borrowed may become necessary to give effect to the same in the different context of the statute to which it is borrowed. Since, section 13 of the Entry Tax Act borrows, amongst others the provisions of Section 40 of the VAT Act on the principle "mutatis mutandis", we may first try and read that provision as it is, into the provisions of the Entry Tax Act. Any incongruity or conflict that may arise upon that language of the borrowed provision as read into the Entry Tax Act, may be identified and resolved, thereafter. If however, there exists no incongruity or conflict, that provision may be applied without offering any intervention or alteration or modification to the original language of the borrowed provision. No rule of interpretation would be attracted to give full effect to the meaning of the provision, except the rule of literal interpretation.
24. Thus, we may first read Section 40 of the VAT Act as a part of the Entry Tax Act by reading the words "this Act" used in Section 40 of the VAT Act to be a reference made to the Entry Tax Act as that presumption is self-apparent from section 13(xv) of the Entry Tax Act. Applying this first principle, Section 40 of the VAT Act as borrowed by the Entry Tax Act would read as under:-
Refund and adjustment-
(1) Subject to other provisions of this Act (i.e. Entry Tax Act), the assessing authority shall in the manner prescribed, refund to the dealer an amount of tax, fee, or other dues paid in excess of the amount due from him under this Act (i.e. Entry Tax Act).
PROVIDED that amount found to be refundable shall first be adjusted towards tax or any other amount outstanding against the dealer under this Act (i.e. Entry Tax Act) or under The Central Sales Tax Act, 1956 or under the erstwhile Act and only the balance if any shall be refunded.
25. Clearly, no incongruity or ambiguity or doubt emerges from the above exercise. Under the VAT Act, the main part of section 40(1) provided for adjustment of any amount found refundable under that Act against specified dues under other enactments namely under that Act, i.e. the U.P. VAT Act, 2008, the Central Sales Tax Act, 1956 and, the U.P. Trade Tax Act, 1948 (i.e. The "Erstwhile Act" defined under Section 2(k) of the VAT Act). It did not contemplate adjustment of a refund against any dues under the Entry Tax Act. Read into the Entry Tax Act, that provision only allows for adjustment of any amount of tax due, either under that Act, i.e. the Entry Tax Act or the Central Tax Act or the "erstwhile Act". Only ambiguity may exist as to the true meaning of the term "erstwhile Act". In absence of any contrary intention shown, it may be given the same meaning as assigned under the VAT Act. Therefore, it may be read to mean the UP Trade Act, 1948 only. To read the words "this Act" (appearing in the later part of section 40 of the VAT Act), as "VAT Act" in the Entry Tax Act, would be without any basis, logic or reasoning. It would be a passionate interpretation made in favour of the revenue i.e. a construction made devoid of reasoning and therefore unacceptable in law.
26. Then, as explained in the decision relied upon by the learned counsel for the revenue in Siddhartha Viyas and another Vs. Ravi Nath Misra and others (Supra), a proviso may principally serve any of the three purposes namely, to provide an extension to the main provision or an exception to the main provision or it may contain substantively, a new provision. In any case, the proviso may not be read to defeat the object of the main enactment.
27. Accepting and applying that test invoked by learned counsel for the revenue, we find it difficult to sustain the submission based thereon. In the present case, we have examined Section 40 of the VAT Act as it existed in that enactment. Here, we find, the first proviso to sub-section 1 of Section 40 is merely an exception to the main provision. Thus, the main provision mandated the authorities under the VAT Act to refund to an assessee any amount of tax, fee or other dues paid in excess of the amount due from him under that Act for any assessment year. At the same time, the proviso restricted that refund payment to only such amount as may remain in excess after adjustment of any outstanding dues (for any Assessment Year or tax period) either under the VAT Act or the Central Act or the Erstwhile Act i.e. the Trade Tax Act.
28. Besides the fact that it is the plain grammatical meaning of the language used, it can never be said that the proviso thus interpreted would defeat the object of the VAT Act. We find that the object of the VAT Act could only be to impose, determine and recover VAT in accordance with that Act. There is no legislative intent shown to exist, under that Act, to recover dues of Entry Tax Act. In the context of a fiscal legislation, an exception to that principle has been offered by the first proviso to Section 40(1) by allowing for recoveries of other dues of tax, specified therein, namely, Central Sales Tax and the U.P. Trade Tax from any amount of VAT that may be found refundable.
29. Section 40 of the VAT Act does not provide for recovery of any amount of tax that may have been due under the Entry Tax Act. That interpretation and plain grammatical sense cannot be read to defeat the object of the VAT Act, to any extent. The VAT Act does not provide and it does not contemplate imposition of Entry Tax on any goods or transactions. Then, it provides for assessment and recovery of amounts of VAT assessed or due, from individual assessees. Therefore, by way of reasoning even if any amount of Entry Tax imposed under another enactment may remain unpaid while a refund under the VAT Act may be allowed or be granted, would be a factor extraneous to the scheme, object and purpose of the VAT Act.
30. In absence of express words used to that effect, it is neither permissible nor required to read into the language of section 40 of the VAT Act, any word or introduce any meaning as may allow for recovery of dues of Entry Tax. That provision, read as it is, is wholly complete, meaningful and functional. It does not lead to any ambiguity, doubt, conflict, absurdity or unworkability. Therefore, there is no room to apply the rule of purposive construction invoked by the revenue. The objection raised by the revenue to that effect is misconceived.
31. Applied Section 40 of the VAT Act, mutatis mutandis to the Entry Tax Act, it would provide for refund of excess amount of Entry tax, fees or other dues deposited by a dealer under the Entry Tax Act, after adjustment of any other amount due either under the Entry Tax Act or the Central Tax Act or the Trade Tax Act, 1948. Correspondingly, the fact that any amount of VAT may remain unpaid upon such refund of Entry Tax being paid would remain an extraneous consideration to a refund claim made under the Entry Tax Act. The provision of section 40 having been applied mutatis mutandis to the provision of the Entry Tax Act it would require, no amount of Entry Tax be refunded to an assessee unless other specified tax amounts due against that assessee were first adjusted.
32. However, in the present case, the petitioner was not seeking any refund under the Entry Tax Act. Therefore, the provisions of that Act could not be invoked while rejecting a claim for refund made under the VAT Act. It is for that reason, we have chosen to first consider the interpretation to be given to Section 40(1) of the VAT Act in the context of a refund claimed arising under the VAT Act as that is the only factual and legal context that exists in the present case. The petitioner has neither claimed nor appears to be entitled (at this stage) to any refund under the Entry Tax Act. Therefore, the submission advanced by learned counsel for the revenue appears to be totally misconceived and it cannot therefore be accepted.
33. It is only to deal with the merits of the submissions advanced by the revenue, we have chosen to consider the effect of Section 40(1) of the VAT Act as applied in the statutory context of the Entry Tax Act. At the same time we reiterate, the fact situation to apply that provision to in the context of Entry Tax Act is plainly non-existent.
34. Thus in the above conspectus the communications dated 7.07.2020 and 11.08.2020 are hereby quashed to the extent they seek to adjust the amount of refund claimed under the VAT Act, against dues of interest claimed under the Entry Tax Act. The respondent is directed to pay out the refund Rs. 17,45,68,741/-, in accordance with law together with statutory interest due from the date of the impugned order dated 07.07.2020 till the date of actual payment.
35. Thus, the writ petition succeeds and is accordingly allowed. No order as to costs.
Order Date: 16.11.2021 Saurabh