M.M.KUMAR, J. - (1.) THE right to payment of interest on refund has once again been raised in this petition filed by M/s Escotel Mobile Communication Ltd. (for brevity, 'the assessee petitioner') by invoking the writ jurisdiction of this Court under Article 226 of the Constitution. It has been prayed that direction be issued to the respondent State to refund Rs. 95,66,924/- plus interest (46,58,324 + 49,08,600 plus interest) for the assessment years 2000- 01 and 2001-02.
(2.) THE assessee petitioner was a registered dealer under the Haryana General Sales Tax Act, 1973 (for brevity, 'the Act') as well as the Central Sales Tax Act, 1956 (for brevity, 'the 1956 Act'). Subsequently, it has been registered, after the repeal of the Act, under the Haryana Value Added Tax Act, 2003 (for brevity, 'the VAT Act'). The assessee petitioner is engaged in the business of mobile telecommunication and is a Limited Company. It is carrying on its business at Anand Banquet Hall, Delhi Road, Sonepat. The assessee petitioner filed statutory returns for the assessment years 2000-01 and 2001-02. The assessment was finalized by the Assessing Authority, Sonepat, vide orders dated 30.1.2003 and 26.2.2003 respectively. The element of 'Activation Charges' was included in the turnover by the assessing authority, which levied tax and interest creating additional demands of Rs. 46,48,324/- and Rs. 49,29,593/- in respect of both the assessment years under the Act. Aggrieved by those assessment orders, the assessee petitioner filed two appeals, which were dismissed by the Joint Excise and Taxation Commissioner (Appeals) Rohtak, vide order dated 30.4.2004. On further appeal to the Haryana Tax Tribunal (for brevity, 'the Tribunal'), the orders of assessment were set aside, vide order dated 25.4.2006 (P-1). The Tribunal followed the judgment of Hon'ble the Supreme Court in the case of Bharat Sanchar Nigam Limited v. Union of India, (2006)3 SCC 1, and held that the value of SIM Card Activation Charges could not be included in turnover. The view of the Tribunal is discernible from the penultimate para of its order, which read as under :- "Activation charges is a service provided by the service providers to the users of handsets. Service of activation of the SIM Card is only service and is not includible in the value of SIM Card. In view of what the Hon'ble Supreme Court has decided in Writ Petition (Civil) 183 of 2003 (Bharat Sanchar Nigam Ltd., and Anr.-petitioner v. Union of India and Ors.-Respondent) decided on 2.3.2006 which we respectfully follow and hold that in the value of SIM Card activation charges could not be included." The assessee petitioner placing reliance on the provisions of Section 43 of the Act and Rules 35 and 38 of the Haryana General Sales Tax Rules, 1975 (for brevity, 'the Rules') made two applications dated 15.5.2006 (P-2 and P-3) with a request to the assessing authority that amount of Rs. 95,66,924/- in respect of both the assessment years, as already noticed in the preceding para, be refunded. On 17.5.2006, the assessing authority asked the assessee petitioner to appear on 12.6.2006 before it for recalculation of the tax liability for the assessment years 2000-01 and 2001-02 to determine the refund amount (P-4). Accordingly, the representative of the assessee petitioner appeared on 12.6.2006 but the hearing was deferred to 21.6.2006. The assessing authority, vide orders dated 21.6.2006 (P-5 and P-6) recalculated the tax for the assessment years 2000-01 and 2001-02 under the Act and found that the assessee petitioner was entitled to refund of Rs. 95,66,924/- in respect of both the assessment years. The assessing authority further observed in his orders Annexures P-5 and P-6 that applications for refund have already been filed by the assessee petitioner and refund may be allowed. The assessee petitioner did not receive the recalculated amount of refund as per the orders dated 21.6.2006 passed by the assessing authority and it had to send a reminder dated 15.2.2007 (P-7). Despite reminder and the clear position in law, no refund was made, which led to the filing of the instant petition on 2.5.2007.
(3.) IN the written statement filed by the respondents it is claimed that the Assessing Authority, Sonepat, passed orders dated 21.6.2006 (P-5 and P-6) for refund of the amount in accordance with the observations made by the Tribunal in its order dated 25.4.2006 (P-1). It has been pleaded that thereafter respondent No. 2 following the provisions of Rule 36 of the Rules placed the matter relating to the refund of the assessee petitioner before the Deputy Excise and Taxation Commissioner, Sonepat, who made the following observation :- "Financial Year : 2000-2001 "Action under Section 10 of Central Sales Tax is pending as the dealer purchased goods against "C" forms and disposed of in free scheme. Assessing Authority to take action immediately." Financial Year : 2001-2002 "As per balance sheet the dealer purchased goods against "C" forms and disposed of in free scheme. Penal action under Section 10 of C.S.T is pending. Assessing Authority to examined and take action." It has, thus, been pleaded that refund could not be given to the assessee petitioner within the stipulated period as penal action under Section 10A of the 1956 Act were yet to be finalized. The respondent State has also pointed out that the revisional authority, vide his order dated 30.5.2007 (R-1), after affording due opportunity to the assessee petitioner has imposed a penalty amounting to Rs. 16.00 lacs under Section 10-A of the 1956 Act and without loss of time, the assessing authority worked out the refund vide his order dated 7.6.2007, by deducting penal amount of Rs. 16.00 lacs and released the payment of Rs. 30,58,324/- (R-1). The amount has been finally paid to the assessee petitioner on 29.6.2007. Referring to Rule 36 of the Rules, it has been asserted that all refunds where the amount to be refunded exceeds ten lacs rupees, have to be approved by the Excise and Taxation Commissioner, Haryana, Chandigarh and refund can only be released after such order. It has been further asserted that the Assessing Authority, Sonepat, vide his order dated 2.11.2006, dropped the penal proceedings under Section 10A of the 1956 Act for the financial year 2001-02 and vide his order dated 10.11.2006, found the assessee petitioner entitled to refund. The recommendation was placed before the Excise and Taxation Commissioner, Haryana through proper channel, which consumed some time and order was passed on 16.4.2007 for refund of an amount of Rs. 49,08,600/- and accordingly refund voucher for the aforementioned amount was given to the assessee petitioner on 30.5.2007. It is claimed that the assessee petitioner is not entitled to any interest under Section 43 of the Act read with Rule 35 of the Rules.;