Bombay High Court
Bharat Serums And Vaccines Limited vs State Of Maharashtra on 2 January, 2024
Author: G. S. Kulkarni
Bench: G. S. Kulkarni
2024:BHC-OS:247
14.WPL31429_2023.DOC
Vidya Amin
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION (L) NO. 31429 OF 2023
Bharat Serums and Vaccines Ltd. ... Petitioner
Versus
State of Maharashtra & Ors. ...Respondent
Mr. Rohan Shah, Mr. Srisabri Rajan, Mr. Mohammed Anajwalla, Mr.
Anupam Dighe, Ms. Chandni Tanna & Mr. Prathamesh Chavan i/b.
India Law Alliance for the petitioner.
Ms. Jyoti Chavan, Addl. G.P. for respondent nos. 1 and 2.
_______________________
CORAM: G. S. KULKARNI &
FIRDOSH P. POONIWALLA, JJ.
DATED: 2 January, 2024
_______________________
P.C.
1. The petitioner in this petition under Article 226 of the Constitution of India has prayed for the following reliefs:
"a) that this Hon'ble Court be pleased to declare that: (i) the collection and retention of the amount of Rs. 12.38 crores which was collected by the Respondents during the investigation stage in December 2016 ( cash payment Rs.9.99 crores + refunds adjusted -Rs.2.39 crores) towards the purported CST liability (tax and interest), and (ii) the additional adjustment of refunds amounting to Rs.2.03 crores at the assessment stage by the Respondents, towards the purported CST liability, are:
- ultra vires the statutory scheme. of taxation under the Constitution of India and the provisions of Sections 9, 18A, 20, 21 and 22 of the Central Sales Tax Act, 1956, and
- the ultra vires the rights and protections guaranteed to the Petitioner under Articles 14, 265 and 300A of the Constitution of India.
b) that this Hon'ble Court be pleased to issue a Writ of mandamus, or a Writ in the nature of mandamus, or any other Page 1 of 10
2 January, 2024
14.WPL31429_2023.DOC appropriate Writ, Order or directions, directing the Respondents to refund to the Petitioner:
(i) a sum of Rs. 12.38 crores which was collected by the Respondents during the investigation stage in December 2016 (cash payment - Rs.9.99 crores + refunds adjusted - Rs.2.39 crores) towards the purported CST liability ( tax and interest), and
(ii) a sum of Rs.2.03 crores, the additional adjustment of refunds made bythe Respondents at the assessment stage by the Respondents, towards the purported CST liability.
c) that pending the hearing and final disposal of the Writ Petition, this Hon'ble Court be pleased to direct the Respondents to deposit with this Hon'ble Court:
(i) a sum of Rs. 12.38 crores which was collected by the Respondents during the investigation stage in December 2016 ( cash payment Rs.9.99 crores + refunds adjusted -Rs.2.39 crores) towards the purported CST liability (tax and interest), and
(ii) a sum of Rs.2.03 crores, the additional adjustment of refunds made by the Respondents at the assessment stage by the Respondents, towards the purported CST liability."
2. The case of the petitioner in the present proceedings is in regard to a claim for refund of the Central Sales Tax (CST) amounts deposited by the petitioner with the respondents. The petitioner in such context had earlier approached this Court in the proceedings of Writ Petition No. 3023 of 2017, which came to be disposed of by an order dated 14 September, 2018 passed by the Division Bench of this Court. The said order is required to be noted, which reads thus:
"1. This petition under Article 226 of the Constitution of India seeks refund of amounts deposited with the Revenue under Central Sales Tax Act, 1960 read with Maharashtra Value Added Tax Act, 2002(Acts). This on the ground that this deposit done Page 2 of 10 2 January, 2024
14.WPL31429_2023.DOC during the course of a search was not justified, as it was contrary to the provisions of the Acts.
2. Mr. Sonpal, learned Counsel appearing for the Revenue states that the amounts of which refund is being sought were deposited by the petitioners on filing revised returns and/or regular return under the Acts. Thus, no interference is warranted in writ jurisdiction. However, he also very fairly states that the assessments of the revised/ regular returns of the petitioners for the Financial Years 2010-11 to 2016-17 are in progress. On instructions, he further states that the assessment would be done expeditiously and if on assessment the petitioners are found entitled to refund, the same shall be granted in accordance with law.
3. We accept the above statement on behalf of the Revenue.
4. In view of the above, Mr. Shah, learned Counsel appearing in support of the petition, on instructions, seeks to withdraw this petition. However, he seeks liberty to urge the contentions raised herein before the Authorities, who are in the process of assessing the revised returns/ regular returns for the Financial Years 2011- 12 to 2016-17.
5. Liberty as sought is granted.
6. In the above view, the petition is disposed as withdrawn with the aforesaid liberty.
7. All the contentions of the parties are left open."
3. It is the case of the petitioner that in pursuance of the above order passed by this Court, the Deputy Commissioner of State Tax had passed two orders dated 31 January, 2019 and 18 March, 2020. However, in passing such orders, the petitioner's case on the entitlement to the refund was not adjudicated. The petitioner, therefore, again approached this Court in the proceedings of Writ Petition No. 2763 of 2021 inter alia praying for a direction that the respondent should be directed to refund to the petitioner the amounts deposited towards the Central Sales Tax along with the deposit as Page 3 of 10 2 January, 2024
14.WPL31429_2023.DOC made and also of interest and penal interest, totalling to an amount of Rs.14. 41 crore paid for F. Y. 2011-12 to F.Y. 2016-17. The petitioner also assailed the assessment orders. The said Writ Petition came to be disposed of by an order dated 27 June, 2022 whereby this Court set aside the orders dated 31 January, 2019 and 18 March, 2020 and remanded the matter for a de novo consideration of the Deputy Commissioner of State Tax, in terms of what has been observed by this Court in paragraphs 4 and 6 of the order. The said order is required to be noted, which reads thus:
"1. Petitioner has approached this court seeking a direction to respondents to refund the CST, interest and penal interest of Rs.14.41 crore paid for F.Y. 2011-12 to F.Y. 2016-17.
2. This is the second round of litigation and we are constrained to state that respondents have to strictly comply with the direction given by the Court in its order dated 14.09.2018 passed in writ petition No. 3203 of 2017.
3. In writ petition No. 3203 of 2017 also, petitioner sought refund of amount deposited with revenue under Central Sales Tax Act, 1956 read with Maharashtra Value Added Tax Act, 2002 ("the Acts" for short). That petition has been filed on the ground that the deposit done during the course of the search was not justified as it was contrary to the provision of the Acts. The order dated 14.09.2018 passed in writ petition No. 3203 of 2017 reads as under :
"1. This petition under Article 226 of the Constitution of India seeks refund of amounts deposited with the Revenue under Central Sales Tax Act, 1960 read with Maharashtra Value Added Tax Act, 2002 (Acts). This on the ground that this deposit done during the course of a search was not justified, as it was contrary to the provisions of the Acts.
2. Mr. Sonpal, learned Counsel appearing for the Revenue states that the amounts of which refund is being sought were deposited by the petitioners on filing revised returns and / or regular return under the Acts. Thus, no interference is warranted in writ jurisdiction. However, he also very fairly states that the assessments of the revised / regular returns of the petitioners for the Financial Years 2010-11 to are in progress. On instructions, he further states that the Page 4 of 10 2 January, 2024
14.WPL31429_2023.DOC assessment would be done expeditiously and if on assessment the petitioners are found entitled to refund, the same shall be granted in accordance with law.
3. We accept the above statement on behalf of the Revenue.
4. In view of the above, Mr. Shah, learned Counsel appearing in support of the petition, on instructions, seeks to withdraw this petition. However, he seeks liberty to urge the contentions raised herein before the Authorities, who are in the process of assessing the revised returns / regular returns for the Financial Years 2011-12 to 2016-17.
5. Liberty as sought is granted.
6. In the above view, the petition is disposed as withdrawn with the aforesaid liberty.
7. All the contentions of the parties are left open ."
4. Therefore the Adjudicating Authority as could be seen from paragraph 2 quoted above is under obligation to grant refund where petitioner was entitled to any refund. The orders of the Adjudicating Authority passed on 31.01.2019 and 18.03.2020 are totally silent on the issue of refund to petitioner. Petitioner therefore has approached this court on the issue of refund as also other points raised in the two orders.
5. Mr. Sonpal states the orders are reasoned, but in fairness agrees with the court that the orders should have dealt with the issue of refund as directed by this Court in the order dated 14.09.2018.
6. In the circumstances, we hereby quash and set aside two orders dated 31.01.2019 and 18.03.2020 passed by Deputy Commissioner of State Tax and remand the matter for de novo consideration. The concerned Adjudicating Authority shall consider all submissions of petitioner and pass a reasoned order dealing with every submission raised by petitioner within 8 weeks from today.
7. Before passing any order, petitioner shall be given a personal hearing and notice of personal hearing shall be given at least seven days in advance.
8. If the Adjudicating Authority is going to rely on any judgment or authority or judicial pronouncement of any forum, a list thereof shall be provided to petitioner along with notice of personal hearing so that petitioner can deal with or distinguish the same. If after the personal hearing, petitioner wishes to file written submissions, the same shall be filed within three working days thereafter. Page 5 of 10
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9. Mr. Shah states that petitioner will co-operate with respondents and attend the hearing and will not seek any adjournment.
10. In view of the above, Mr. Shah appearing for the petitioner undertakes to withdraw the petition. Petition stands disposed as withdrawn. We make it clear that we have not made any comments on the merits of the matter.
11. At this stage, Mr. Shah states that there is a separate order dated 12.05.2021 passed in respect of F.Y. 2016-17 where the facts are identical, in which also refund issue has not been considered. Mr. Shah states that if the court can quash that order also and remand for de novo consideration to the Adjudicating Authority, petitioner will be saved from filing another writ petition and this court also not burdened with another Petition. Mr. Sonpal, in fairness as an officer of the Court, has no objection. We appreciate the stand of Mr. Sonpal.
12. In the circumstances, the order dated 12.05.2021 for F.Y. 2016- 17 is also quashed and set aside. The directions as above given for the years mentioned in the petition will be followed also for F.Y. 2016- 2017.
(emphasis supplied)
4. It has so transpired that after the above orders were passed by this Court, a show cause notice dated 18 May, 2023 for the period from 2014 to 2016-17 came to be issued to the petitioner. The petitioner responded to the said show cause notice by its detailed reply, which was filed on 16 June, 2023. In such reply, the petitioner set out a categorical case in regard to the entitlement to the refund amounts, which were subject matter of the proceedings before this Court in the Writ Petitions as noted by us, and on which this Court had passed substantive orders. The petitioner also responded to the show cause notice on merits.
5. On the said show cause notice, the impugned assessment orders have been passed under section 9(2) of the Central Sales Tax Act, by which a Page 6 of 10 2 January, 2024
14.WPL31429_2023.DOC demand has been raised against the petitioner in terms of what has been set out in the operative portion of the said order. The demand being for an amount of Rs.2,16,09,345/- in the first order dated 25 August, 2023, which is for the period 1 April, 2014 to 31 March, 2015, and in the second order which is for the subsequent period, the demand is of an amount of Rs.4,41,20,880/-. The said amounts would include the interest and penalty amounts. Insofar as the petitioner's claim for refund as made in the petitioner's application dated 20 June, 2017 is concerned, the assessment orders have negatived the petitioner's refund claim on a reasoning, that although the petitioner had prayed for refund of the amounts, the refund will have to be arrived after the working of the tax liability payable or refundable. It is further observed that, however, the working of tax for this period had resulted in dues, hence, there would not be any question of refund, and for such reason the claim of refund would be required to be rejected. The observation to this effect as made in the orders passed by the Deputy Commissioner which is common in both orders is required to be noted, which reads thus:
"..... Though the dealer has asked for the refund of said paid amount, the refund claim will be arrive after the working of tax liability payable or refundable. But, the working of tax for this period result in dues, hence there is no question of refund. Hence the claim of refund is rejected."
6. Mr. Shah, learned counsel for the petitioner has more than one grievance on the impugned orders, however, his primary grievance is that the Page 7 of 10 2 January, 2024
14.WPL31429_2023.DOC refund claim as made by the petitioner has been rejected by the Deputy Commissioner of State Tax, without assigning any reasons and according to him illegally. Mr. Shah has supported such contention by drawing our attention to the grounds as raised in the Writ Petition as also referring to the provisions of the Central Sales Tax Act, which according to him ought to have been adhered to by the Deputy Commissioner of State Tax in passing the impugned order. It is, therefore his submission that the claim of the petitioner for refund of the amounts and as clearly set out in the petitioner's application dated 20 June, 2017, was required to be independently considered and decided with appropriate reasons and in accordance with law. It is thus submitted that the impugned order on such ground is required to be quashed and set aside.
7. On the other hand, Ms. Chavan, learned Addl. G.P. has supported the impugned order. It is her submission that the petitioner would not be entitled to the refund and the approach of the authority considering the law is appropriate and ought not to be interferred. It is also her submission that if the petitioner is aggrieved by such order, the remedy for the petitioner is to pursue the statutory appeal. Mr. Shah, responding to such contention, would submit that the petitioner being seriously aggrieved on the rejection of the refund claim would withdraw the appeal in the event the Assessing officer reconsiders the issues and pass a fresh order in accordance with law. Page 8 of 10
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8. Having heard the learned counsel for the parties and having perused the record as also the impugned order and also bearing in mind the orders passed by this Court on the two earlier petitions filed by the petitioner, we are of the opinion that it was necessary for the Assessing officer/Deputy Commissioner of State Tax to have addressed the issue of refund as claimed by the petitioner in a more elaborate manner. He ought to have furnished adequate reasons on the case which was put up by the petitioner for his consideration, in taking a decision on such refund claim of the petitioner. We note that the refund application of the petitioner dated 20 June, 2017 have raised substantive grounds which were required to be dealt with reasons. However, considering the meager reasons, as recorded by the Deputy Commissioner of State Tax which we have been extracted hereinabove, we are clearly of the opinion that such reasons are surely not sufficient so as to amount to an appropriate adjudication of the refund claim of the petitioner, as the law would mandate.
9. Thus, considering the peculiar facts and circumstances of the case and without going into the merits of the rival contentions, we are of the opinion that the Assessing Officer/Deputy Commissioner of State Tax needs to de novo consider the proceedings and pass appropriate assessment orders, which may be a consolidated order or otherwise, however, by furnishing appropriate reasons on the refund application of the petitioner in accordance with law. Page 9 of 10
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14.WPL31429_2023.DOC
10. We, accordingly, dispose of this petition in terms of the above directions keeping open all contentions of the parties. Let appropriate orders be passed by the Deputy Commissioner of State Tax after hearing the petitioner within a period of three months from the date this order is presented before the officer.
11. Disposed of. No costs.
(FIRDOSH P. POONIWALLA, J.) (G. S. KULKARNI , J.)
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Signed by: Vidya S. Amin 2 January, 2024
Designation: PS To Honourable Judge
Date: 06/01/2024 15:01:17