Punjab-Haryana High Court
M/S Jatindra Construction Company vs Bharat Sanchar Nigam Limited And Others on 2 April, 2012
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH.
CWP No. 11860 of 2011 (O&M)
Date of Decision: April 2, 2012
M/s Jatindra Construction Company
...Petitioner
Versus
Bharat Sanchar Nigam Limited and others
...Respondents
CORAM: HON'BLE MR. JUSTICE M.M. KUMAR
KUMAR
HON'BLE MR. JUSTICE ALOK SINGH
Present: Mr. S.C. Nagpal, Advocate,
for the petitioner.
Mr. Anil Rathee, Advocate,
for respondent Nos. 1 and 2.
Mr. Piyush Kant Jain, Addl. A.G., Punjab
for respondent Nos. 3 and 4.
1. To be referred to the Reporters or not?
2. Whether the judgment should be
reported in the Digest?
M.M. KUMAR, J.
1. The instant petition filed under Article 226 of the Constitution seeks a direction to the respondents to pay statutory interest in terms of Section 12(3) of the Punjab General Sales Tax Act, 1948 (for brevity, 'the Act'). It is pertinent to mention that for the aforementioned relief, the petitioner has placed reliance on the Letters Patent Bench judgment of this Court rendered in the case of Instalaciones Y. Services v. State of Punjab and others M/s Cobra Instalaciones (LPA No. 740 of 2009, decided on 26.8.2009).
26.8.2009)
2. It is apposite to notice that various petitions were filed before this Court for declaring Section 10(C) of the Act read with Rule 25-A of the Punjab General Sales Tax Rules, 1949 (for brevity, CWP No. 11860 of 2011 (O&M) 2 'the Rules') as unconstitutional and beyond the competence of the State Legislature. A further prayer was made in those petitions for refund of the amount deducted from the bills of the dealers and deposited as sales tax. The said deductions were made under Section 10(C) of the Act read with Rule 25-A of the Rules at source from the bills raised qua the work contracts. Furthermore, a deduction of 2% from the payment made to the sub-contractors was also made and deposited with the sales tax department. However, at the time of framing of assessment, the credit thereof was not given. After passing of the orders by the Sales Tax Tribunal, the dealers were refunded the due amount but without interest. According to Section 10(C) of the Act read with Rule 25A of the Rules a provision has been made authorising levy of taxes on a transaction concerning execution of various works contract granted to the dealers. The writ petitions eventually came up for consideration before the learned Single Judge, who after detailed consideration of various judgments of Hon'ble the Supreme Court came to the conclusion that provisions of Section 10(C) of the Act was beyond the competence of the State Legislature. No direction was issued by the learned Single Judge with regard to payment of interest, which led to filing of applications in the decided writ petitions, seeking grant of that relief. However, the applications were dismissed.
3. Feeling aggrieved, the dealers filed letters patent appeals including LPA No. 740 of 2009. The question of law which came up for determination before the Letters Patent Bench was whether the dealers would be entitled to statutory interest in terms of Section 12(3) of the Act. The Letters Patent Bench (of which one of us, M.M. Kumar, J. was a member) after referring the provisions CWP No. 11860 of 2011 (O&M) 3 of Section 12(3) of the Act, opined as under:-
" A perusal of Section 12(3) of the Act would show that the amount is required to be refunded and if the refund is not made within 90 days of the date of the order then the dealer is to become entitled to get simple interest on such amount at the rate of one percent per month from the date immediately following the date of expiry of the said period for a period of one month and thereafter at the rate of one and a half per centum per month till the refund is made. The amount of refund has already been disbursed. The writ petitions were filed in the year 2005 and the refund has been made by the respondents on 07.03.2006 admittedly under Section 12 of the Act and according to the provisions of Section 12(3) of the Act the delay in refund would attract the imposition of interest as per the rates specified in Section 12(3) of the Act. Accordingly, there cannot be any escape from the conclusion that interest was payable to the dealer-appellant.
As a sequel to the above discussion, the order dated 13.08.2008 of the learned Single Judge is supplemented and modified to the extent that interest in terms of Section 12(3) of the Act deserves to be awarded to the appellant-dealers. The order of the learned Single Judge passed on the applications on 20.07.2009 is set aside. The respondents are directed to calculate the interest and disburse the same within a period of six weeks from the date of receipt of a certified copy of this order."CWP No. 11860 of 2011 (O&M) 4
4. It is, thus, evident that the Letters Patent Bench has allowed payment of interest on the amount of refund under Section 12(3) of the Act.
5. In the instant case, the petitioner also filed CWP No. 1127 of 2004 challenging vires of Section 10 (C) of the Act, which was allowed on 10.3.2011 (P-2) by a Division Bench of this Court in terms of the judgment dated 14.8.2008 rendered by the learned Single Judge in CWP No. 19579 of 2002 (P-1). The Division Bench also granted liberty to the petitioner to seek appropriate remedy for its claim for refund in accordance with law. On 21.10.2010 (P-4), a sum of `35,519/- on account of sales tax refund was sent to the petitioner but without payment of interest under Section 12(3) of the Act. The petitioner also sent legal notices dated 8.4.2011 (P-5) and 2.5.2011 (P-6) but the same have not been responded by the respondents.
6. Having heard learned counsel for the parties we are of the considered view that the matter is no longer res integra. The instant petition is squarely covered by the Letters Patent Bench judgment rendered in the case of M/s Cobra Instalaciones Y. Services (supra) and accordingly allowed in the same terms. The respondents are directed to calculate the interest and disburse the same within a period of six weeks from the date of receipt of a certified copy of this order.
(M.M. KUMAR) JUDGE (ALOK SINGH) SINGH) April 2, 2, 2012 JUDGE Pkapoor