IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) WEDNESDAY, THE TWENTY NINTH DAY OF APRIL TWO THOUSAND AND NINE PRESENT THE HON'BLE SRI ANIL R.DAVE, THE CHIEF JUSTICE and THE HON'BLE MR JUSTICE RAMESH RANGANATHAN WRIT PETITION NO : 5485 of 2009 Between: M/s. Godrej Agrovet Ltd. I.D.A. A Kondapally, Krishna District. Rep by its Authorised Signatory, Mr. T.K. Sethuraman ..... PETITIONER AND The Commercial Tax Officer, Nandigama Circle, Bhavanipuram, Vijayawada-12, Krishna District. .....RESPONDENT Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to to issue writ, order or direction particularly one in the nature of Writ of Mandamus or any other appropriate writ or order or direction; (a) declaring that the petitioner is entitled for interest of Rs. 4,41,660/- on the refund amount of Rs. 9,13,889/- for the year 1994-95 from 08-7-1999 to 18-7-2003 and interest of Rs.7,782/- on the refund amount of Rs. 33,833/- for the year 1997-98 from 20-8-2001 totaling to Rs. 4,49,442/- as per the provisions under section 33 of the Andhra Pradesh General Sales Tax Act (b) declaring the action of the respondent in passing the impugned order dated 11-11-2008 basing on the audit report after five years levying interest on the balance tax amount for the year 1999-2000 already paid/adjusted without reference to the order dated 18-7-2003 and without granting interest on the refund amounts due to the petitioner for the assessment years 1994-95 and 1997-98, that too calculating interest from 07-3-2002 instead of 18- 7-2003 as arbitrary illegal, excessive and unsustainable and consequently c) direct the respondent to adjust the interest of Rs. 62,486/- leviable for the year 1999-2000 from out of the interest amount of Rs. 4,49,442/- payable to the petitioner for the years 1997-98 and refund the balance amount of Rs. 3,86,955/- to the petitioner forthwith by setting aside the order dated 11-11-2008 of the respondent and d) to pass Counsel for the Petitioner:MR.P.GIRISH KUMAR Counsel for the Respondent No.: GP FOR COMMERCIAL TAX The Court made the following : THE HON'BLE SRI ANIL R. DAVE, THE CHIEF JUSTICE and THE HON'BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION NO: 5485 of 2009 ORDER: (THE HON'BLE SRI JUSTICE RAMESH RANGANATHAN ) The proceedings of the respondent dated 1.11.2008, whereby the petitioner was called upon to pay Rs.1,33,839/- towards interest, is the subject matter of challenge in this writ petition. Facts, in brief, are that the petitioner, an assessee on the rolls of the respondent, was assessed to tax for the year 1994-95. The appeal preferred before the Appellate Deputy Commissioner was allowed by order dated 8.1.1999 and a consequential order dated 3.1.2002 was passed directing refund of Rs.9,13,889/- to the petitioner. For the assessment year 1997-98 the assessing authority, in his order dated 20.02.2001, held that Rs.33,833/- was liable to be refunded to the petitioner. However neither of the aforementioned amounts was, in fact, refunded. The respondent passed assessment order, for the assessment year 1999-2000, on 7.2.2002 raising a demand for Rs.10,88,161/. The respondent issued revised proceedings dated 4.7.2003, for the assessment year 1996-97, resulting in the petitioner having to pay tax of Rs.4,429/-. Likewise, for the assessment year 1998-99, revised proceedings were issued by the respondent on 14.7.2003 and, as a result, Rs.2,90,066/- was held as the tax due to be paid by the petitioner. Thus, as on 14.7.2003, while the petitioner was liable to pay Rs.13,82,656/- towards sales tax, Rs.9,47,722/- excess sales tax paid earlier was liable to be refunded to them. The respondent passed an order on 18.7.2003 adjusting the amount and showing a balance of Rs.4,34,934/- as due and payable by the petitioner. The petitioner claims to have received the said adjustment order only on 7.1.2004 and to have paid the said amount. Thereafter, notice dated 8.2.2007 was issued by the respondent informing the petitioner that the Accountant General, in his audit report dated 13.10.2003, had pointed out that they were liable to pay interest of Rs.3,91,738/- towards delayed payment of tax. The respondent passed an order on 26.6.2007 levying Rs.3,91,738/- as penal interest for non-payment of the tax due from the petitioner. The petitioner filed W.P.No.4548 of 2008 and this Court, by order dated 4.3.2008, set aside the impugned order and directed the respondent to pass a fresh order after giving the petitioner an opportunity of being heard. The petitioner filed his objections on 25.3.2008 contending that he was entitled to receive Rs.4,49,442/- towards interest on belated refund. They requested the respondent to pay the said amount after deducting the interest payable by them. They would contend in this writ proceedings that the impugned order was without jurisdiction, that the respondent, having accepted payment pursuant to the proceedings dated 18.7.2003 which order had become final, could not insist on payment of interest after four years more so on the basis of an audit report, that, even assuming that interest was liable to be paid, it should be computed not from 07.03.2002 but only from 18.7.2003. In the counter affidavit filed by respondent, it is stated that the petitioner was not entitled to claim interest for the assessment years 1994-95 and 1997-98 as these orders had attained finality on 18.7.2003, that the petitioner never raised any dispute with regards non-payment of interest earlier, that it was only after the impugned order was passed that a plea had been taken regarding non- payment of interest for the assessment years 1994-95 and 1997- 98, that the petitioner could not raise this new plea at this distance of time and, if he was aggrieved by the order dated 18.7.2003, he could have challenged the same before the appellate authority within the stipulated time. Sri P.Girish Kumar, Learned Counsel for the petitioner, would submit that, while the interest liable to be paid for belated payment of tax for the assessment year 1997-98, was under Section 33-A of the APGST Act, refund of Rs.9,13,889/-, for the assessment year 1994-95, was under Section 33-B of the Act. Learned counsel would submit that it was not open to the respondent to claim payment of interest on the belated payment of tax by the petitioner while denying them interest for belated refund. Learned counsel would submit that, while refund of Rs.33,833/- was ordered by the respondent for the assessment year 1997-98, refund of Rs.9,13,889/- for the assessment year 1994-95, was pursuant to the order of the appellate authority dated 8.1.1999. Sri K.Raji Reddy, Learned Special Standing Counsel for Commercial Taxes, would, on the other hand, contend that, since the Act and the Rules stipulated an application being made in the prescribed form for a claim of refund and, in the absence of any application having been made seeking refund, there was no obligation on the part of the respondents to refund the amount. Learned counsel would submit that no limitation is prescribed for levying interest on belated payment of tax, that the factum of non- payment of interest came to light on an audit objection and that the respondent was justified in levying interest on belated payment of tax. No statutory provision or judicial pronouncement which disentitles the respondent from claiming interest, on belated payment of tax, after a lapse of six years has been brought to our notice. On the other hand, under Section 16(3)(a) of the APGST Act, if the tax assessed is not paid by the dealer within the time specified therefore, the dealer shall pay, in addition to the amount of such tax, interest calculated per every one hundred rupees or part thereof at the specified rates for the period of delay from the due date or the date specified for its payment. The action of the respondents in levying interest on belated payment of tax by the petitioner cannot, therefore, be faulted. It is no doubt true that, under Section 33-A(1), every claim for refund under section 33 shall be made by the assessee in such form and verified in such manner as may be prescribed, on or after the date on which the tax in respect of which the claim is made was directed to be refunded and, under Sub-section (2), no such claim shall be allowed unless it is made within three years from the date specified in sub-section (1). While the petitioner would contend that they had submitted a representation seeking refund of Rs.33,833/-, as ordered by the assessing authority for the assessment year 1997- 98, it is not in dispute that no application was submitted in the prescribed form or within the time specified under Section 33-A of the APGST Act. In the absence of a proper application being submitted, it cannot be said that the respondent is not justified in denying the petitioner interest on the belated refund of excess tax paid of Rs.33,833/-. The fact, however, remains that refund of Rs.9,13,889/- for the assessment year 1994-95 is not as a result of the assessment order, but is pursuant to the order of the appellate authority dated 8.1.1999. Section 33-B provides that where, as a result of any order passed in appeal, refund of any amount becomes due to the assessee, the assessing authority shall refund the amount to the assessee without his having to make any claim in that behalf, or adjust or apply such amount as provided in section 33. As no application is required to be made for refund of this amount, the respondent ought to have refunded the excess tax paid for the assessment year 1994-95 immediately after the appellate authority had passed his order, and failure on their part to do so, would entitle the petitioner to be compensated by payment of interest at 12% per annum as is provided in the case of belated refund by the assessing authority under Section 33-E from the date of the order of the appellate authority till the date on which the said amount was adjusted. The plea of latches is only to be noted to be rejected. Having sought payment of interest for belated payment of tax after a lapse of more than six years, it is not open to the respondent to take the very same plea of latches to deny interest on the belated refund made to the petitioner. While Sri P.Girish Kumar, Learned Counsel for the petitioner, would contend that, on such computation, it is the petitioner who is entitled to be paid certain amount, we do not propose to take upon ourselves the task of computing the interest liable to be paid to the petitioner for the belated refund of Rs.9,13,889/- by the respondent. We deem it proper, in the circumstances, to set aside the impugned order and direct the respondent to compute the interest liable to be paid for the belated refund of Rs.9,13,889/- to the petitioner, for the assessment year 1994-95, and, thereafter, pass orders afresh in accordance with law. The petitioner shall be entitled for an oral hearing before any orders are passed afresh by the respondent. The entire exercise in this regard shall be completed with a period of four months from the date of receipt of a copy of this order. The writ petition is allowed in part. However, in the circumstances, without costs. ___________________ ANIL R. DAVE, CJ _____________________________ RAMESH RANGANATHAN, J April, 2009 asp/nsr