Harsha Devani, J. -
(1.) Rule. Ms. Maithili Mehta, learned Assistant Government Pleader, waives service of notice of rule on behalf of the respondents. Having regard to the controversy involved in the present case, which lies in a very narrow compass and with the consent of the learned advocates for the respective parties, the matter was taken up for final hearing today.
(2.) By this petition under Article 226 of the Constitution of India, the petitioner has challenged the order dated 3.7.2015 passed by the Deputy Commissioner of Commercial Tax, Range -13, Nadiad (the third respondent herein) and also seeks a direction to him to disburse the refund along with the interest forthwith in terms of the provisional refund orders dated 18.2.2015 and 10.3.2015.
2.1 The petitioner is a proprietary concern of Shri Amit Trilokchand Goyal and is, inter -alia, engaged in trading of various products, including cigarettes. The petitioner is a dealer registered under the provisions of the Gujarat Value Added Tax Act, 2003 (hereinafter referred to as the "GVAT Act") as well as under the Central Sales Tax Act, 1956. The petitioner purchased cigarettes of various brands from the State of Gujarat and availed input tax credit in terms of Sec. 11(3) of the GVAT Act as the same were purchased for the purpose of re -sale in the State of Gujarat and in the course of inter -state trade and commerce. Since the petitioner was not in a position to utilise the entire amount of input tax credit availed on purchase of the goods, he filed a provisional refund claim for Rs. 1,69,68,477/ - in terms of the provisions of rule 37 of the Gujarat Value Added Tax Rules, 2006 (hereinafter referred to as "the rules") on 17.11.1994 for the tax period 1.7.2014 to 30.9.2014. It is the case of the petitioner that he had submitted the requisite documents, viz., sales and purchase registers, purchase invoices, sales invoices, lorry receipts, check -post form (Form No. 402), list of C -forms received and photocopies of the profit and loss account and balance sheet, along with the affidavit of the petitioner to the effect that they would return the amount of refund if it was not found to be in terms of the provisions of the GVAT Act to substantiate the claim of provisional refund.
2.2 The third respondent granted an opportunity of personal hearing to the petitioner, whereupon the petitioner appeared through his advocate and stated that the provisional refund claim should be granted in terms of Sec. 37 of the GVAT Act read with various circulars issued by the second respondent from time to time. After considering the documents submitted by the petitioner for sanctioning the provisional refund, the third respondent, by an order dated 18.2.2015, sanctioned the refund claim of Rs. 1,52,42,129/ - (at 90% of the refund claim) in terms of the circulars dated 17.2.2007 and 1.7.2008.
2.3 Thereafter, the refund sanctioned vide order dated 18.2.2015 was withheld by the respondent on account of cancellation of registration of one of the dealers from whom the petitioner had purchased the said goods. It is the case of the petitioner that he had remained present before the third respondent and provided all the requisite documents to show that tax on the disputed transactions was duly paid and the registration of the dealer was in existence at the time when the goods were sold to the petitioner. The third respondent, after being satisfied with the documents submitted by the petitioner and after making an independent inquiry, vide order dated 10.3.2015, directed the Assistant Commissioner of Commercial Tax to sanction the provisional refund. Upon receipt of the order dated 10.3.2015, the petitioner approached the Assistant Commissioner of Commercial Tax with a request to disburse the refund in terms of the provisional refund orders dated 18.2.2015 and 10.3.2015 whereupon the petitioner was given to understand that the refund would be sanctioned immediately after completion of the financial year. However, since the refund was not disbursed even after the financial year 2014 -15 was over, the petitioner vide letter dated 23.4.2015 requested the Assistant Commissioner of Commercial Tax to disburse the refund in terms of the above provisional refund orders.
2.4 In response to the above letter dated 23.4.2015, the Assistant Commissioner of Commercial Tax, by a letter dated 27.4.2015, informed the petitioner that the third respondent had directed him not to disburse the amount of refund till further orders. He had also stated that since he did not have jurisdiction over the sanction of refund and the Deputy Commissioner was only the proper officer to sanction and disburse the refund claim, the petitioner should approach the Deputy Commissioner of Commercial Tax for sanctioning the refund.
2.5 Since the third respondent did not disburse the amount of provisional refund claim, the petitioner was continuously following up with the office of the third respondent. In the meanwhile, the third respondent issued a show cause notice dated 22.5.2015 to the petitioner calling upon him to submit various documents in support of the provisional refund claim and fixed the personal hearing on 8.6.2015. Pursuant to the show cause notice dated 22.5.2015, the petitioner, by a letter dated 8.6.2015, submitted various documents as sought for by the third respondent and also provided the information that was sought for by the Deputy Commissioner. Certain other additional documents were also submitted along with the letter dated 9.6.2015.
2.6 By the impugned order dated 3.7.2015, the third respondent, withheld the amount of refund sanctioned provisionally vide orders dated 18.2.2015 and 10.3.2015. Being aggrieved, the petitioner has filed the present petition seeking the reliefs noted hereinabove.
(3.) Mr. S.N. Soparkar, Senior Advocate, learned counsel for the petitioner invited the attention of the court to the provisions of the GVAT Act to submit that the respondent No. 3, having passed an order of provisional refund, there is no provision for review thereof. Under the circumstances, it is not permissible for the third respondent to review the order of provisional refund. It was pointed out that in relation to every dispatch, the corresponding Form No. 402 is on record and hence, there is no reason to disbelieve the genuineness of the transactions. It was pointed out that there is no suggestion either in the show cause notice or in the impugned order that grant of refund would adversely affect the revenue. Referring to the provisions of Sec. 39 of the GVAT Act, it was submitted that the same can have no application in the facts of the present case inasmuch as there are two conditions precedent for exercise of powers under Sec. 39 of the Act: firstly the order giving rise to refund should be subject matter of appeal or further proceedings or any other proceedings under the Act; and secondly that the Commissioner should form an opinion that grant of refund is likely to adversely affect the revenue. It was submitted that in the facts of the present case neither is the order of refund subject matter of appeal or further proceedings nor is any other proceeding under the Act pending in relation thereto; nor is there is any suggestion, either in the show cause notice or in the impugned order, that grant of refund would adversely affect the revenue. It was submitted that, therefore, neither of the two conditions precedent are satisfied in the fact of the present case, under the circumstances, in the absence of recording of satisfaction as envisaged under Sec. 39 of the GVAT Act, the impugned order is bad in law. According to the learned counsel, apart from the fact that it is not expressly stated in the impugned order that the grant of refund is likely to adversely affect the revenue, there is even no suggestion that any transaction contrary to law has taken place or that it is likely to adversely affect the revenue.
3.1 The learned counsel submitted that while the authorities have power to withhold refund under Sec. 39 of the GVAT Act, there is no power to suspend. It was pointed out that the impugned order suspends the order of provisional refund without there being any power vested in the respondents to suspend such order. According to the learned counsel, further proceedings would be post an assessment order and hence also, Sec. 39 of the GVAT Act would have no application. It was also contended that the availability of an alternative remedy under the statute is no remedy, as the entire exercise is without jurisdiction, inasmuch as, there is no power vested in the authorities to pass such interim directions which are totally without jurisdiction. It was submitted that assuming for the sake of argument that Sec. 39 of the GVAT Act is applicable; even then, powers thereunder have to be exercised by a higher authority and not the same officer.
3.2 In support of his submissions, the learned counsel placed reliance upon the decision of this court in the case of Kanak Fabrics v/s. Income Tax Officer, : (2013) 359 ITR 447 (Guj.) wherein the court had, in the context of provisions of Sec. 147 of the Income Tax Act, observed that in the absence of any satisfaction having been recorded by the Assessing Officer that income has escaped assessment by reason of failure on the part of the petitioner to disclose fully and truly all material facts necessary for its assessment for the assessment year under consideration, the assumption of jurisdiction under Sec. 147 of the Act is invalid. It was submitted that the condition precedent for exercise of powers under Sec. 39 of the GVAT Act is that the Commissioner must record satisfaction that if the refund is not withheld, it would adversely affect the revenue, in the absence of which even if any assessment is pending, it is irrelevant. It was pointed out that no such satisfaction has been recorded in the impugned order or even in the affidavit -in -reply, to submit that the whole proceedings are, therefore, without jurisdiction and consequently, the impugned order is bad in law. As regards the alleged irregularities, the attention of the court was invited to the show cause notice dated 22.5.2015, to point out that certain queries have been raised in response to which the petitioner has filed his reply dated 8.6.2015 giving full details in respect of such queries. It was submitted that consequently the objections have been scaled down to the effect that the transporters do not own the vehicles. It was argued that after passing the order under Sec. 39(1) of the GVAT Act, the respondents are now seeking reasons to support the order. It was, accordingly, urged that the impugned order whereby the order sanctioning provisional refund has been kept in suspension, being without authority of law, deserves to be set aside.;