# M/s Birla Corporation Ltd v. The State of U.P. & Ors

- **Citation:** (2022) 1 ILRA 1029
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2021-12-07
- **Case number:** Writ Tax No. 749 of 2020
- **Bench:** Naheed Ara Moonis, Saumitra Dayal Singh
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-birla-corporation-ltd-v-the-state-of-u-p-ors-47634
- **Pages:** 15

## Headnote

Tax, 2008 - Sections 40 & 81 - U.P. Trade
Tax Act, 1948 - Section 29 - The petitioner
cannot rely on any statutory provision of the
VAT Act to claim interest from the date of the
order. Only two courses were available to the
petitioner on 16.10.2004 to either pursue his
claim of refund under Section 29 of the Act of
1948 or to have pressed before this Court to
provide for payment of interest on the refund as
the Act of 1948 stood repealed on that date.
(Para 24)

The provision of law providing for interest on
delayed payment of refund would apply to only
those cases that fall under purview of section
40(1) of the VAT Act. This is the plain effect of
Section 40(2) of the VAT Act. (Para 22)
Writ Petition Rejected. (E-10)

List of Cases cited:

## Text

_Characters 0–39,815 of 48,154. This is a partial read: ask again with offset=39815 for what follows._

1 All. M/s Birla Corporation Ltd. Vs. The State of U.P. & Ors.
1029
various exceptions to this general rule where
disclosure of evidential material might inflict
serious
harm
on
the
person
directly
concerned or other persons or where
disclosure would be breach of confidence or
might be injurious to the public interest
because it would involve the revelation of
official secrets, inhibit frankness of comment
and the detection of crime, might make it
impossible to obtain certain clauses of
essential information at all in the future (see
R. v. Secy. of State for Home Deptt., ex p H
[1995 QB 43 : (1994) 3 WLR 1110 : (1995) 1
All ER 479 (CA)])."

22. It is pertinent to note here that a three
Judge Bench of the Supreme Court in the case
of City Corner Vs. P.A. to Collector &
ADM10 has held that it is not always necessary
that the documents asked for should themselves
be furnished provided the substance of those
documents is furnished, always provided,
however, that the summary is not misleading.
The Supreme Court held that such was not the
case there, but when the appellant asked for the
original documents, he could at least have been
told that he had already been given a summary
of documents which was sufficient to enable
him to make his representation and he could
make his fuller representation as he had
promised in his earlier so called interim reply.

23. In view of the facts and circumstances
appearing in the present case, for want of the
inspection report before this Court, it cannot be
presumed that the substance of the inspection
report or the summary of the documents was
furnished and that the summary was not
misleading. It is also a matter of conjecture
whether the relevant facts contained in the
inspection
report
necessary
to
file
an
appropriate reply by the petitioner, were
declared in the show-cause notice-cum-order.
Therefore, it is held that non-furnishing of the
inspection report resulted in denial of
opportunity to the petitioner to submit a proper
reply to the show cause notice, and has
consequently caused serious prejudice to it, and
as such has vitiated the order impugned dated
1.4.2021 passed by the respondent no. 3.

24. Therefore, the order impugned dated
1.4.2021 passed by the respondent no. 3, Excise
Commissioner, Uttar Pradesh (Annexure No.
13 to the writ petition) and the order dated
25.8.2021 passed by the respondent no. 2,
Special Secretary, Department of Excise in
Revision No. 29 of 2021 (Annexure No. 18 to
the writ petition) cannot be sustained and are
hereby quashed.

25. It is, however, open to the respondents
to proceed in light of the observations made
above and take appropriate steps, in accordance
with the law, further to the reply dated
10.3.2021 furnished by the petitioner to the
show cause notice-cum-order dated 6.3.2021.

26. Subject to the aforesaid observations,
this writ petition is allowed.
----------
(2022)01ILR A1029
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 07.12.2021

BEFORE

THE HON'BLE NAHEED ARA MOONIS, J.
THE HON'BLE SAUMITRA DAYAL SINGH, J.

Writ Tax No. 749 of 2020
With Writ Tax Nos. 766 of 2020, 767 of 2020 &
768 of 2020

M/s Birla Corporation Ltd. ...Petitioner
Versus
The State of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
1030 INDIAN LAW REPORTS ALLAHABAD SERIES
Sri Sujeet Kumar, Ms. Chhaya Gupta, Sri
Santosh Kumar Bagaria (Sr. Adv.)

Counsel for the Respondents:
C.S.C., Sri C.B. Tripathi

A. Interpretation of Statute - Value Added
Tax, 2008 - Sections 40 & 81 - U.P. Trade
Tax Act, 1948 - Section 29 - The petitioner
cannot rely on any statutory provision of the
VAT Act to claim interest from the date of the
order. Only two courses were available to the
petitioner on 16.10.2004 to either pursue his
claim of refund under Section 29 of the Act of
1948 or to have pressed before this Court to
provide for payment of interest on the refund as
the Act of 1948 stood repealed on that date.
(Para 24)

The provision of law providing for interest on
delayed payment of refund would apply to only
those cases that fall under purview of section
40(1) of the VAT Act. This is the plain effect of
Section 40(2) of the VAT Act. (Para 22)
Writ Petition Rejected. (E-10)

List of Cases cited:

1. M/s Shahkari Khand Udyog Mandal Ltd. Vs
Commissioner of Central Excise & Customs AIR
2005 SC 1897

2. M/s Indodan Milk Products Ltd. Vs St. of U.P.
& anr. 1983 UPTC 583

3. P.P.G. Asian Paints Pvt. Ltd. Vs Deputy
Commissioner, Commercial Tax & ors. 2016 NT 60

4.
Lucent
Technologies
(P)
Ltd.
Vs
Commissioner, Trade Tax, U.P., Lko (2015) 82
VST 371 (ALL) (FB)

5. Commissioner of Sales Tax, U.P. Vs Hind
Lamps Ltd. JT 2008 (8) SC 590

6. Suhas H. Pophale Vs Oriental Insurance CO.
Ltd. & its Estate Officer (2014) 4 SCC 657

7. National Engineering Industries Ltd. Vs
Commissioner of Central Excise Jaipur (2005) 13
SCC 418 (distinguished)
8. U.O.I. Vs Tata Chemicals Ltd. (2014) 6 SCC
335
(Delivered by Hon'ble Naheed Ara
Moonis, J. & Hon'ble Saumitra Dayal
Singh, J.)

1. Heard Sri Santosh Kumar Bagaria,
learned Senior Advocate, assisted by Sri
Sujeet Kumar and Ms. Chhaya Gupta,
learned counsel for the petitioner and Sri
C.B. Tripathi, learned Special Counsel
appearing for the revenue.

2. By means of these four writ
petitions, the petitioner has sought payment
of interest on the alleged delayed payment
of refund due to it under section 40(2) of
the U.P. Value Added Tax Act, 2008
(hereinafter referred to as the 'VAT Act') for
A.Ys. 2004-05, 2005-06, 2006-07 and
2007-08. Individual writ petitions have
been filed for each assessment year. Brief
details of the writ petitions are as below:

Sl.No
.
Writ
Tax
No.
Assessm
ent Year
Amount
of
Refund
Granted
1.
749 of
2020
2004-05
1,24,73,696/
-
2.
766 of
2020
2005-06
6,21,78,915/
-
3.
767 of
2020
2006-07
6,02,23,413/
-
4.
768 of
2020
2007-08
3,96,92,735/
-

3. Though the aforesaid refund
claimed were granted to the petitioner vide
orders
dated
29.06.2020,
by
further
communications dated 07.07.2020 and
11.08.2020
issued
by
the
Deputy
Commissioner, Commercial Tax, Sector - 3,
Prayagraj, the said authority had adjusted
the amount of refund quantified at Rs.
1 All. M/s Birla Corporation Ltd. Vs. The State of U.P. & Ors.
1031
17,45,68,741/-
for
A.Ys.
2004-05
(beginning 14.10.2004) to 2007-08 (ending
31.12.2007), claimed by the petitioner
under the provisions of U.P. Trade Tax Act,
1948 (hereinafter referred to as the
'Erstwhile Act') against the outstanding
demand of interest due on delayed
payments of entry tax Rs. 18,10,01,347/-
for A.Ys. 2003-04 and 2009-10 under the
U.P. Tax on Entry of Goods into Local
Areas Act, 2007 (hereinafter referred to as
the 'Entry Tax Act').

4. The petitioner challenged the
aforesaid adjustment of refund by means of
Writ Tax No. 748 of 2020. It was heard and
decided on 16.11.2021. That hearing
proceeded on an admission made by the
revenue that the claim for refund made by
the petitioner [as was dealt with vide
communications
dated
29.06.2020,
07.07.2020 and 11.08.2020 by the Deputy
Commissioner, Commercial Tax, Sector - 3,
Prayagraj (impugned in that writ petition)],
arose and was decided in accordance with
the provisions of the VAT Act.

5. Though reference had been made to
the provisions of the Erstwhile Act, no
doubt was expressed by either party to the
eligibility of refund claimed by and granted
to the petitioner under the provisions of the
VAT Act or to the applicability of that
enactment. In view of such concession
made by the State, the issue of applicability
of the VAT Act to the refund claimed by the
petitioner, was assumed to exist. Therefore,
and as would be discussed later, on that
issue the said decision would remain
confined as a decision obtaining on the
facts of that case.

6. By means of the present petitions,
the issue of interest on the refund claim
alone has been raised. Therefore, it
must be tested on its own merits. The facts
involved in the present case insofar as they
are common to the earlier M/S Birla
Corporation Limited Vs. The State of
U.P. And 3 Others, Writ Tax No. 748 of
2020, as have also been recorded in the
order dated 16.11.2021, are quoted below:

"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 section5 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. Midway 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
1032 INDIAN LAW REPORTS ALLAHABAD SERIES
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
1 All. M/s Birla Corporation Ltd. Vs. The State of U.P. & Ors.
1033
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."

7. Learned Senior Counsel appearing
for the petitioner would submit, unlike
section 29 of the Erstwhile Act, section 40
of the VAT Act clearly provides for
payment of interest after expiry of thirty
(30) days from the date of receipt of the
order giving rise to refund. Referring to the
order dated 16.04.2010 passed by a
division bench of this Court in M/S Birla
Corporation Ltd. Vs. State of U.P. &
Anr., Misc. Bench No. 6176 of 2004,
it has been submitted, the interest became
due w.e.f. 16.04.2010. In appeal decision of
the Supreme Court in State of U.P & Anr.
Vs. Birla Corporation Ltd., 2019 SCC
Online 1569, no fresh or independent
direction was issued regarding refund.
Even the stipulation of just exceptions on
account of unjust enrichment, pre-existed.
In that regard, reliance has been placed on a
three-Judge bench decision of the Supreme
Court in M/S Sahakari Khand Udyog
Mandal Ltd. Vs. Commissioner of
Central Excise & Customs, AIR 2005 SC
1897. Thus, referring to section 40(2) of the
VAT Act, it has been submitted, the process
of
verification
of
facts
as
to
the
applicability or otherwise of the principle
of unjust enrichment should have been
made within thirty (30) days from the date
16.04.2010 and refund paid within that
time. No fresh condition and no fresh
limitation of time arose upon the order of
the Supreme Court dated 20.11.2019 in
State
of
U.P.
&
Anr.
Vs.
Birla
Corporation Ltd. (supra). The interest
liability was incurred by the State, by
operation
of
law.
The
submissions
advanced by the revenue that the refund
claim did not arise, and no interest became
due to the petitioner in absence of any
order of refund, has been seriously
disputed. The earlier decisions of this Court
in M/S Indodan Milk Products Ltd. Vs.
State of U.P. & Anr., 1983 UPTC 583,
P.P.G. Asian Paints Pvt. Ltd. Vs. Deputy
Commissioner, Commercial Tax & Ors.,
2016 NTN 60 and, a Full Bench decision in
Lucent
Technologies
(P)
Ltd.
Vs.
Commissioner,
Trade
Tax,
U.P.,
Lucknow, (2015) 82 VST 371 (ALL) (FB)
as also decision of the Supreme Court in
Commissioner of Sales Tax, U.P. Vs.
Hind Lamps, Ltd., JT 2008 (8) SC 590
1034 INDIAN LAW REPORTS ALLAHABAD SERIES
are claimed to be wholly distinguishable as
those decisions arose in the context of
section 29 of the Erstwhile Act. They have
no application to the present facts as refund
has been granted under section 40 of the
VAT Act.

8. In this regard, reference has been
made to a decision of the Supreme Court in
Suhas H. Pophale Vs Oriental Insurance
Company Limited and Its Estate Officer,
(2014) 4 SCC 657. Further, in support of
his submission, learned Senior Counsel for
the petitioner has relied on another decision
of
the
Supreme
Court
in
National
Engineering
Industries
Ltd.
Vs
Commissioner of Central Excise Jaipur,
(2005) 13 SCC 418 to submit - the refund
claim became due on 16.04.2010 upon the
earlier writ petition filed by the present
petitioner (Misc. Bench No. 6176 of 2004),
being allowed. On that date, the Erstwhile
Act did not exist. The only statutory law in
force was section 40 of the VAT Act.
Therefore, only that provision would
govern the claim for interest. Under section
40 of the VAT Act the claim for interest
may arise upon an order giving rise to
refund passed by a Court and it is not
dependent on any further or specific order
to be passed by the assessing authority to
grant such refund. Therefore, the interest
liability accrued upon lapse of thirty days
from the order dated 16.04.2010. Last, it
has been submitted, the revenue having
retained the money without any authority
of law, it is liable to compensate the
petitioner with interest for such an illegal
act. Reliance has been placed on a decision
of a Supreme Court in Union of India Vs.
Tata Chemicals Ltd., (2014) 6 SCC 335.

9. Opposing the writ petition, Sri C.B.
Tripathi, learned Special Counsel placed
heavy reliance on the provision of section
29 of the Erstwhile Act and the earlier
division bench decisions of this Court in
M/S Indodan Milk Products Ltd. Vs.
State of U.P. & Anr. (supra) and P.P.G.
Asian Paints Pvt. Ltd. Vs. Deputy
Commissioner, Commercial Tax & Ors.
(supra). That view is asserted to have been
affirmed by the Full Bench of this Court in
Lucent
Technology
(P)
Ltd.
Vs.
Commissioner, Trade Tax U.P. Lucknow
(supra) that is consistent to the ratio of the
decision
of
the
Supreme
Court
in
Commissioner of Sales Tax, U.P. Vs.
Hind Lamps Ltd. (supra). Carrying his
submission further, Sri Tripathi, would
submit, in the present facts, no amount was
found refundable either by this Court or the
Supreme Court. Therefore, a specific order
of refund was necessary to be passed before
any amount may have been refunded to the
petitioner. The order quantifying the refund
was passed on 29.06.2020. Thereafter, that
refund amount was adjusted against other
demands of interest on entry tax, on
07.07.2020. Thus, it cannot be said that any
refund remained pending beyond the
statutory period of thirty days from the
order
of
refund
being
passed.
Consequently, no interest liability was
incurred
by
the
respondent-State
authorities.

10. At the first instance, we record our
utter dismay at the approach adopted by the
revenue. The present writ petitions and
Writ Tax no.748 of 2020 were listed
together on 16.11.2021. All five petitions
had arisen from common facts and orders.
Subject to time availability, all petitions
would have been heard and decided on the
same day. Yet, the revenue chose to adopt
different stance as to the applicable law, in
the two sets of petitions that have come
into existence only by pure chance. Writ
Tax 748 of 2020 was heard and oral order
1 All. M/s Birla Corporation Ltd. Vs. The State of U.P. & Ors.
1035
was
passed
thereon
on
16.11.2021.
Thereafter, the present batch of petitions
were heard. Hearing could not conclude
due to paucity of time. Hence these four
petitions
are
listed
today.
In
such
circumstances, there exists an inconsistent
duality in the stand adopted by the revenue.

11. In any case, the earlier writ
petition being Writ Tax No.748 of 2020
was confined to the issue whether the
liability of interest on entry tax could be
adjusted against any other refund of trade
tax found due to the petitioner. On the other
hand, here the issue is to the entitlement of
interest on the refund of trade tax that
became due upon the earlier order of this
Court dated 16.04.2010. We have allowed
the revenue to advance submissions that are
at variance with the submissions advanced
by it in the earlier writ (already decided by
us vide order dated 16.11.2021), more out
of helplessness, and not out of choice.

12. Having thus heard learned counsel
for the parties and having perused the
record, in the first place, we may take note
of the certain statutory provisions. Under
the Erstwhile Act, the provision of refund
existed in the shape of section 29 of that
Act. A slightly different provision existed
in the shape of section 40 of the VAT Act. It
would be useful to our discussion, to
extract in tabular form the provisions of
sections 29 of the Erstwhile Act and 40 of
the VAT Act, as below :

Section
29.
Refund
(1) The assessing
authority shall, in
the
manner
prescribed, refund
to a dealer any
40.
Refund
and
adjustment
(1) Subject to other
provisions
of
this
Act, the assessing
authority shall in the
manner
prescribed,
amount
of
tax,
fees or other dues
paid in excess of
the amount due
from him under
this Act:
Provided that the
amount found to
be
refundable
shall
first
be
adjusted towards
the tax or any
other
amount
outstanding
against the dealer
under this Act or
under the Central
Sales
Tax Act,
1956 (Act 74 of
1956), and only
the
balance,
if
any,
shall
be
refunded.
(2) If the amount
found
to
be
refundable
in
accordance
with
sub-section (1) is
not refunded as
aforesaid
within
three months from
the date of order
of refund passed
by the Assessing
Authority or, as
the case may be,
from the date of
receipt by him of
the
order
of
refund,
if
such
order is passed by
any
other
competent
authority
or
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.
Provided further that
refund,
of
excess
amount of input tax
credit, shall, without
prejudice
to
other
conditions,
be
subject to conditions
and restrictions of
section 15.

(2)
Where
amount
found
refundable
in
accordance with the
provisions under subsection (1), is not
refunded
within
thirty days from the
date
of
order
of
refund passed by the
assessing authority or
where order giving
rise
to
refund
is
passed by any other
1036 INDIAN LAW REPORTS ALLAHABAD SERIES
Court, the dealer
shall be entitled to
simple interest on
such amount at
the rate of twelve
percent
per
annum
[For
Uttaranchal:
simple interest on
such amount at
the rate of twelve
per
cent
per
annum] from the
date of such order
or, as the case
may be, the date
of receipt of such
order of refund
passed
by
the
Assessing
Authority to the
date of the refund:
Provided that for
calculation
of
interest in respect
of
any
period
after the 26th day
of May, 1975, the
sub-section shall
have effect as if
for the words six
months the words
three months were
substituted
and
for the words six
percent the words
twelve
percent
were substituted.
(3)
Notwithstanding
any
judgment,
decree or order of
any
Court
or
authority,
no
refund shall be
authority or court,
from the date of
receipt of such order
by
the
assessing
authority
by
due
process, the dealer
shall be entitled to
simple interest on
such amount at the
rate
of
twelve
percent per annum
from the date of such
order passed by the
assessing authority or
from the date of
receipt of the order
giving rise to refund
passed by any other
authority or Court,
till the date refund is
made.

Provided
that
where refund relating
to excess amount of
input tax credit due
on
the
basis
of
returns filed by the
dealer, is not allowed
within
the
time
prescribed
under
section 15, the dealer
shall be entitled to
simple interest on
such amount at the
rate
of
twelve
percent per annum
from the date on
which
refund
becomes due and till
the date refund is
made.
(3) Notwithstanding
any judgment, decree
or order of any Court
or
authority,
no
allowed of any
tax or fee due
under this Act on
the turnover of
sales or purchases
or both, as the
case
may
be,
admitted by the
dealer
in
the
returns filed by
him or at any
stage
in
any
proceedings under
this Act.
Explanation I:
The
date
of
refund shall be
deemed to be the
date
on
which
intimation
regarding
preparation of the
refund voucher is
sent to the dealer
in
the
manner
prescribed.
Explanation II:
The
expression
'refund'
includes
any
adjustment
under the proviso
to sub-section (1)
[See Rules 89 to
104]
(4)
Notwithstanding
anything
contained in subsections (1), (2)
and (3), where the
tax has been paid
by a dealer on
purchase
of
certain goods and
the value of goods
refund
shall
be
allowed of any tax or
fee due under this
Act on the turnover
of sales or purchases
or both, as the case
may be, admitted by
the dealer in the
returns filed by him
or at any stage in any
proceedings
under
this Act, whichever is
higher.
(4) Where a dealer
has
requested
the
assessing
authority
for withholding any
amount refundable to
him for adjustment
towards his future
liabilities
either
under this Act or
under
the
Central
Sales Tax Act, 1956,
the dealer shall not
be
entitled
for
interest.
(5)
Where
any
amount of tax has
been deducted from
any
dealer
under
section 34 as tax
payable by him for
any assessment year,
for the purpose of
sub-section
(3),
amount
deducted
shall be deemed to be
tax due under this
Act and shall not be
refunded
to
the
dealer
where
the
dealer -
(a)
has
neither
submitted returns of
1 All. M/s Birla Corporation Ltd. Vs. The State of U.P. & Ors.
1037
manufactured out
of such goods is
inclusive of such
tax and the State
Government
remits
the
tax
liability on such
purchases
retrospectively,
the dealer shall
not be entitled to
refund of tax paid
on purchases of
such goods unless
he proves to the
satisfaction of the
Assessing
Authority that he
has not passed on
the
liability
of
such tax to any
third party as a
result of any sale
or otherwise.
Section 29-A -
Procedure
for
disbursement
of
amount
wrongly
realised by dealer
as tax
(1)
Where
any
amount is realised
from any person
by
any
dealer,
purporting to do
so by way of
realisation of tax
on the sale or
purchase of any
goods,
in
contravention
of
the provisions of
sub-section (2) of
Section 8-A, such
turnover and tax for
all tax periods nor
has submitted annual
return
for
the
assessment year in
which
sales
are
made; and
(b) has been assessed
exparte
for
the
assessment year in
which
sales
are
made.
(6) Where in respect
of sale of any goods,
any amount of tax
has been realized by
a registered dealer
from -
(a) any official or
personnel of-
(i)
any
foreign
diplomatic
mission
or consulate in India;
or
(ii)
the
United
Nations or any other
similar International
body,
entitled
to
privileges under any
convention to which
India is a party or
any other law for the
time being in force;
or
(b) any consular or
diplomatic agent of
any
mission,
the
United Nations or
any
other
body
referred to in subclause (i) or subclause (ii) of clause
(a), and where such
official,
personnel,
dealer
shall
deposit the entire
amount
so
realised in such
manner
and
within
such
period, as may be
prescribed.
(2) Any amount
deposited by any
dealer under subsection (1) shall,
to the extent it is
not due as tax, be
held by the State
Government
in
trust
for
the
person
from
whom
it
was
realised by the
dealer, or for his
legal
representatives,
and the deposit
shall
discharge
such dealer of the
liability in respect
thereof
to
the
extent
of
the
deposit.
(3)
Where
any
amount
is
deposited by any
dealer under subsection (1), such
amount
or
any
part thereof shall,
on a claim being
made
in
that
behalf
be
refunded, in the
manner
prescribed, to the
person
from
consulate or agent
has purchased goods
for himself or for the
purpose
of
such
mission,
United
Nations, or any other
body, then if such
official,
personnel,
agent,
United
Nations
or
body,
after producing tax
invoice referred to in
sub-section(1)
of
section 22 or the sale
invoice referred to in
sub-section (3) of the
said section, as may
be applicable, in the
prescribed
manner,
claims refund of the
amount
of
tax
realised from him,
the Commissioner or
the officer authorised
by him in this behalf,
shall
refund
such
amount
to
such
official,
personnel,
consular or agent of
such mission, United
Nations or body, as
the case may be.
(7) Refund, under
any provisions of this
Act, may be given by
refund voucher or
cheque:
Provided that where
a dealer submits etax return, refund of
any amount found
refundable to him
may
be
allowed
through e-cheque.
1038 INDIAN LAW REPORTS ALLAHABAD SERIES
whom such dealer
had
actually
realised
such
amount or part, or
to
his
legal
representatives;
and to no other
person:
Provided that no
such claim shall
be
entertained
after the expiry of
three years from
the date of the
order
of
assessment or one
year from the date
of the final order
on
appeal,
revision
or
reference, if any,
in respect thereof,
whichever is later.
Explanation.
-
The
expression
"final order on
appeal,
revision
or
reference,"
includes an order
passed
by
the
Supreme
Court
under Article 32,
Article
132,
Article
133,
Article
136
or
Article 137 or by
the High Court
under Article 226
or Article 227 of
the Constitution.
[See Rules 105 to
110]
Section 29-B -
Reimbursement in
respect
of
Explanation- For the
purposes of this Act,
prescribed date shall
be deemed to be the
date of refund.
(8)
The
amount
refundable under the
erstwhile Act may be
adjusted against the
amount of tax or
penalty or any other
dues under this Act."
40-A. Withholding of
refund
in
certain
cases
(1)
Notwithstanding
anything
to
the
contrary contained in
any other provision
of this Act or in any
judgment, decree or
order of any Court,
Tribunal
or
other
authority, where after
giving
reasonable
opportunity of being
heard to the dealer or
the
person
concerned,
the
Commissioner
is
satisfied
on
the
report
of
the
assessing
authority
that,-
(a) the dealer has
submitted
false
return of the turnover
or
has
concealed
particulars
of
his
turnover
or
has
deliberately
furnished inaccurate
particulars of such
turnover
or
has
prevented
the
declared goods
(1) Where any tax
has been levied
under this Act in
respect of the sale
or
purchase
of
any
goods
referred
to
in
Section 14 of the
Central Sales Tax
Act, 1956, and
such goods are
subsequently sold
in the course of
inter-State
trade
or commerce, and
tax has been paid
under
the
said
Central
Act
in
respect of the sale
of such goods in
the
course
of
inter-State
trade
or commerce, the
tax levied under
this Act may, on
an
application
being
made
in
writing
to
the
Assessing
Authority within
six months from
the date on which
the tax was so
paid or the date of
commencement
of
the
Uttar
Pradesh Sales Tax
(Amendment)
Act,
1973,
whichever is later,
be reimbursed to
the person making
such sale in the
course of interassessing authority or
any other competent
authority
from
making
inspection
and examination of
books, accounts or
documents
maintained or goods
shown to be held in
stock by such dealer
or
obstructed
any
competent authority
in
performing
his
functions under this
Act; or
(b) any purchase in
respect
of
which
input tax credit in
any return has been
claimed,
is
not
verifiable; or
(c) the dealer has
obtained tax invoices
without
making
actual purchase of
goods; or
(d) the dealer has
failed to furnish any
security
demanded
from him under any
provision of this Act
or the Central Sales
Tax Act, 1956; or
(e) the circumstances
exist involving fraud,
and
where
the
Commissioner is of
the opinion that if
refund is allowed, it
may not be possible
to realize any amount
of tax or penalty
likely to be levied, he
may
permit
the
assessing authority to
1 All. M/s Birla Corporation Ltd. Vs. The State of U.P. & Ors.
1039
State
trade
or
commerce.
(2)
where
the
Assessing
Authority
is
satisfied that the
application
is
maintainable
under sub section
(1), it shall in the
manner
prescribed
reimburse to the
applicant
the
amount of such
tax and, in any
other case, shall
reject
the
application:

Provided that no
such
application
shall be rejected
wholly or in part
except after the
applicant has been
given
a
reasonable
opportunity
of
being heard:

Provided
further
that the amount
found
to
be
reimbursable shall
first be applied
towards the tax on
any other amount
outstanding
against
the
applicant
under
this Act and only
the
balance,
if
any,
shall
be
pass an order for
withholding,
as
a
security,
such
amount of refund as
would be sufficient
to cover the amount
of tax or penalty or
both, as the case may
be,
likely
to
be
levied, for a period
as
may
be
determined by the
Commissioner.
(2)
Where
the
assessing
authority
finds
that
the
circumstances
mentioned in subsection (1) exist and
sufficient material is
available
on
the
record, it shall send a
report
to
the
Commissioner along
with the material for
seeking
the
permission
to
withhold the amount
of refund.
(3)
The
assessing
authority
shall
complete
the
proceeding
for
assessment
or
penalty
or
both,
pending before him
within such period as
may be determined
by
the
Commissioner.
Provided that if the
Commissioner
is
satisfied
that
the
circumstances
exist
reimbursed.
[See Rules 77, 89,
104 and 105]
which would prevent
the
assessing
authority to complete
the
assessment
or
penalty
proceeding
within
the
determined
period,
he may extend the
period not exceeding
90 days.
(4)
After
the
completion
of
the
proceeding withheld
amount
shall
be
adjusted
against
demand created due
to
assessment
or
penalty
proceeding
and the balance if
any shall be refunded
along with interest at
the rate of twelve
percent per annum
from the date on
which
refund
has
become due, in the
manner
provided
under this Act and
the rules made there
under.
Explanation: For the
purposes
of
this
section
refund
includes the refund
of input tax credit."

13. The Erstwhile Act was repealed
by the VAT Act w.e.f. 01.01.2008. section
81 of the VAT Act reads as under :-

"81. Repeal and saving . - (1) The
Uttar Pradesh Trade Tax Act, 1948 (U.P.
1040 INDIAN LAW REPORTS ALLAHABAD SERIES
Act No. XV of 1948) (hereinafter in this
section
referred
to as
the
repealed
enactment) is hereby repealed.

(2) Notwithstanding such repeal, -

(a) any notification, rule, regulation,
order or notice issued, or any appointment
or declaration made, or confiscation made,
or any penalty or fine imposed, any
forfeiture, cancellation or any other thing
done or any action taken under the
repealed
enactment,
and
in
force
immediately before such commencement
shall, so far as it is not inconsistent with
the provisions of this Act, be deemed to
have been issued, made granted, done or
taken under the corresponding provisions
of this Act.

(b) any right, privilege, obligation or
liability acquired, accrued or incurred
under the repealed Act, shall not be
affected
and
(manufacturing
units)
enjoying facility of moratorium for payment
of tax under section 8 (2-A) of the said Act
shall be entitled to claim moratorium for
payment of tax in accordance with
provisions of section 42.

(3) Any officer, authorised by the
Commissioner
under
the
repealed
enactment, to exercise powers under
section 10-B and sub-section(6) of section
13-A thereof, shall be deemed to have been
authorised by the Commissioner to exercise
such powers under section 56 and subsection(7) of section 48 respectively.

(4) Any order made or direction issued
by the State Government or by the
Commissioner under the repealed Act, for
carrying out purposes thereof, to the extent
the same are not inconsistent with the
provisions of this Act, shall be deemed to
have been issued under the provisions of
this Act.

(5) Any security or additional security,
furnished under the provisions of the repealed
Act, shall be deemed valid for the purposes
under this Act only upon furnishing an
undertaking from the surety to this effect in
the prescribed form and manner within thirty
days from the date of the commencement of
this Act.

Provided that, in appropriate cases, the
assessing authority may extend the time for
furnishing undertaking from sureties.

(6) The mention of particular matters in
this section shall not be held to prejudice or
affect general application of section 6 of the
Uttar Pradesh General Clauses Act, 1904,
with regard to the effect of repeals."

14. Pertinent to our discussion, section
6 of the UP General Clauses Act, 1904 reads
as under :-

"6. Effect of repeal. - Where any [Uttar
Pradesh] Act repeals any enactment hitherto
made or hereafter to be made, then, unless a
different intention appears, the repeal shall
not -

(a) revive anything not in force or
existing at the time at which the repeal takes
effect; or

(b) affect the previous operation of any
enactment so repealed or anything duly done
or suffered thereunder; or

(c) affect any right, privilege, obligation
or liability acquired, accrued or incurred
under any enactment so repealed; or

(d) affect any penalty, forfeiture or
punishment incurred in respect of any offence
committed
against
any
enactment
so
repealed; or

(e)
affect
any
remedy
or
any
investigation
or
legal
proceeding
commenced before the repealing Act shall
have come into operation in respect of any
such right, privilege, obligation, liability,
penalty,
forfeiture
or
punishment
as
aforesaid;

and any such remedy may be enforced
and any such investigation or legal
1 All. M/s Birla Corporation Ltd. Vs. The State of U.P. & Ors.
1041
proceeding
may
be
continued
and
concluded, and any such penalty, forfeiture
or punishment imposed as if the repealing
Act had not been passed.

15. Section 81(2)(d) of the VAT Act
preserves any right, privilege, obligation or
liability acquired, accrued, or incurred
under the repealed Act. On the date of
repeal of the Erstwhile Act, the statutory
law on rebate claimed by the petitioner
under Erstwhile Act did not exist, by virtue
of the repeal made. The challenge raised by
the petitioner to the notification dated
14.10.2004 issued by the State Government
in exercise of its powers under section 5 of
the
Erstwhile
Act
was
pending
consideration in Misc. Bench No. 6176 of
2004. That writ petition came to be decided
on 16.04.2010.

16. Since, on the date of repeal, the
earlier rebate notification dated 27.02.1998
stood withdrawn and only a challenge
thereto was pending before this Court
(under Article 226 of the Constitution of
India), it may never be said that any right
or privilege as to rebate had been acquired
or had accrued in favour of the petitioner as
may have been protected or saved under
section 81(2)(b) of the VAT Act.

17.