Jharkhand High Court: In a petition seeking direction to the respondents to refund excess tax of Rs. 24,00,000 deposited during appellate proceedings for Assessment Year (‘AY’) 2014-15 and Rs.26,00,000 deposited during appellate proceedings for AY 2013-14, the Division Bench of M.S. Ramachandra Rao, CJ and Deepak Roshan J., stated that if the actual tax assessed from the petitioner was much less than the amount which he had deposited at the time of filing the appeal, then retention of the balance after the assessing officer, reduced the demand drastically post remand, would undoubtedly amount to unjust enrichment on the part of the respondents and would be violative of Article 14 and Article 265 of the Constitution.
Thus, the Court directed the respondents to refund the amounts deposited by the petitioner after adjusting the same towards the tax finally assessed post remand by the assessing authority for the AY 2013-14 and AY 2014-15 with interest at the rate of 9% per annum from 09-01-2021 till the date of actual payment.
Background
In the present case, assessment orders were passed for both AYs 2013-14 and 2014-15 and a demand notice was issued to the petitioner which was challenged by the petitioner under section 79 of the Jharkhand Value Added Tax Act, 2005 along with an application seeking stay of the amounts assessed under the said assessment orders.
On 13-02-2019, in the stay applications filed in the respective appeals, the appellate authority passed orders stating that if the appellant deposited 15% of the demanded amount by 25-02-2019, it would result in a stay of both the Assessment Order and the demand notice. Thus, the petitioner complied and deposited Rs. 24,000,00 and Rs. 26,00,000 respectively. Ultimately, the appellate authority remitted the matter back to the Assessing Officer for fresh assessment in respect of both AYs.
Thereafter, the petitioner requested the Assessing Officer to pass a fresh assessment order, and such orders were also passed on 09-01-2021 reducing the tax liability of the petitioner. The respondents thus demanded tax of Rs. 11,067 and Rs. 2,746 from the petitioner overlooking the fact that the petitioner had made deposit before the appellate authority and no credit to the same was given and the balance also was not refunded.
Subsequently, fresh assessment order post remand was also passed on 29-03-2022 reiterating that above amounts were due from the petitioner again without giving credit to the amount already deposited by the petitioner at the time when it had preferred an appeal. Despite several reminders given by the petitioner, the amount deposited by it at the time of filing of the appeal after deducting the tax, subsequently demanded, was not refunded by the respondents.
Analysis, Law, and Decision
The Court stated that it failed to understand how the respondents could have retained the amounts deposited by the petitioner at the time of preferring the appeal and seeking stay of demand, after the appeal was decided, and the matter was remitted back, and after the assessing officer passed a fresh assessment order post remand. The respondents could not retain the amounts deposited by the petitioner pursuant to condition imposed by the appellate authority for stay of the assessment order and contend that there was no necessity to refund the same.
The Court stated that if the actual tax assessed from the petitioner was much less than the amount which he had deposited at the time of filing the appeal, then retention of the balance after the assessing officer, reduced the demand drastically post remand, would undoubtedly amount to unjust enrichment on the part of the respondents and would be violative of Article 14 and Article 265 of the Constitution.
Thus, the Court directed the respondents to refund the amounts deposited by the petitioner after adjusting the same towards the tax finally assessed post remand by the assessing authority for the AY 2013-14 and AY 2014-15 with interest at the rate of 9% per annum from 09-01-2021 till the date of actual payment. The respondents should also pay cost of Rs.2,00,000 to the petitioner for unjustly retaining the said amount for the last four years. The cost as well as the refund should both be paid to the petitioner within six weeks from the date of receipt of a copy of this order.
[Castrol India Ltd. v. State of Jharkhand, W.P.(T) 7098 of 2023, decided on 19-02-2025]
Advocates who appeared in this case:
For the Petitioner: M.S. Mittal, Senior Advocate; Salona Mittal and Yashdeep Kanhai, Advocates.
For the Respondents: A.K. Yadav, Senior S.C.-I; Aditya Kumar, A.C. to Sr. S.C.-I
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