Judgment:
M.M. Kumar, J.
1. This petition filed under Article 226 of the Constitution prays for issuance of a direction to the respondents to refund an amount of Rs. 1,19,934 to the petitioner, which was deposited on July 5, 2000 for release of goods, consequent upon acceptance of the appeal by the Sales Tax Tribunal-I, Punjab (for brevity, 'the Tribunal'), vide order dated September 1, 2005 (P3). The petitioner has also claimed interest on the aforementioned amount under the provisions of Section 12(3) of the Punjab General Sales Tax Act, 1948 (for brevity, 'the 1948 Act') with effect from December 1, 2005, i.e., after expiry of period of ninety days from the date of passing of order dated September 1, 2005 by the Tribunal, till the date of actual refund by the respondents.
2. Brief facts of the case are that consignment of tyres despatched from Mysore was reported on May 7,2000 at 6.30 a. m. at Mahmadpur (Shamboo) near Rajpura. Even though all the documents were produced, the vehicle and the consignment were detained at Paragpur (Jalandhar) by the Excise and Taxation Officer (Mobile Wing) and penalty was imposed, which was paid by the petitioner.
3. The matter ultimately travelled up to the Tribunal and the order of penalty was set aside vide order dated September 1, 2005 (PS). The petitioner sought refund of the amount deposited. On January 3, 2006, another application was filed and several reminders were given but no action was taken on the claim of the petitioner. The petitioner then filed the instant writ petition.
4. On May 23, 2008, notice was issued. In the reply filed, it has been stated that after receiving notice of the instant petition, refund of Rs. 1,19,324 vide refund voucher dated July 7, 2008 was given to the petitioner, which was duly received on July 10, 2008. However, no explanation has been tendered why refund was not given before filing of the writ petition, though the same was statutorily required.
5. On August 25, 2008, following order was passed:
The learned Counsel for the State seeks time to seek instructions on the issue of payment of interest in accordance with law laid down in the judgments relied upon by learned Counsel for the petitioner being, Kashmir South Roadways (Regd.) v. Excise and Taxation Commissioner, U.T., Chandigarh : [2008] 14 VST 320 (P&H;) : [2008] 31 PHT 370 (P&H;), Malli Mai Sant Lal & Co. v. State of Punjab : [2002] 126 STC 331 (P&H;), Sutlej Industries Limited v. State of Punjab [2001] 121 STC 552 (P&H;) and OPK Woollen Mills (P) Ltd. v. State of Punjab [1998] 110 STC 481 (P&H;). List again on October 22, 2008.
6. When the matter came up before the Division Bench on October 22, 2008, learned Counsel for the petitioner apprised the court that the amount was refunded without interest, which was against the statutory provisions of Section 12(3) of the 1948 Act, requiring the payment of interest if the refund was beyond ninety days. The learned Counsel has further asserted that in spite of order dated August 25, 2008, interest has not been paid to the petitioner. After hearing learned Counsel for the parties, the Division Bench made the following observations:
10. From the above, it is clear that there is gross dereliction of duties in not making the refund for a period of more than three years and the Assistant Excise and Taxation Commissioner did not take any step in the matter. Respondent No. 3, Excise and Taxation Commissioner, Punjab has also failed in performing his duties and overseeing the working of the Department and also in not ensuring the refund, which is the statutory right of the petitioner.
11. There is a flow of cases of this nature in this Court and at times, it is stated that refunds are not given for extraneous considerations.
12. In another petition listed today being C.W.P. No. 18293 of 2008, Jai Bharat Trading Co. v. State of Punjab (decided on November 25, 2008--Punjab and Haryana High Court) it has been pointed out that refund has been given after seventeen years and that too without any interest.
13. The above shows a dismal picture of honesty and responsibility of the Sales Tax Officers responsible for giving refund. If the Department has right to recover, it cannot ignore its duty to refund the amount found to have been illegally recovered. Mechanism has to be evolved by the administration to fix accountability and responsibility for abuse of power.
14. We direct the Chief Secretary, Punjab to look into the matter and take appropriate action against the persons found responsible and also against respondents Nos. 3 and 5 for dereliction of duties, which is patent in the present case and submit a report to this Court before the next date.
15. We make it clear that if Chief Secretary fails to comply with the order, he will be held personally accountable for the default.
7. In pursuance of order dated October 22, 2008, an affidavit of the Chief Secretary, Punjab, dated November 21, 2008, has been filed, stating that the refund has been made to the petitioner and the Chief Secretary had a meeting with Financial Commissioner, Excise and Taxation for evolving a mechanism. The explanations of some officers have also been called and appropriate action was to be taken after considering the reply. In the minutes of meeting, dated November 20, 2008 (R1 Colly), it has been mentioned that method and system should be in place so that right of a person to receive refund can be duly looked after. It has been further observed that a monitoring system needs to be drawn up to ensure compliance of statutory provisions. The Department has disposed of refund applications to the extent of eighty-one persons. It has been also recorded that the pending refund applications would be promptly disposed of.
8. Another affidavit dated February 25, 2009 was filed by the Chief Secretary, Punjab, containing further progress in the matter including various short-term and long-term measures to be adopted by the Department which carve out various steps for streamlining the system of VAT refunds. On March 9, 2009, learned Counsel for the petitioner placed on record documents showing that amount of refund along with interest has been released by the respondents. Yet another affidavit dated March 20, 2009 has been filed by the Chief Secretary, Punjab, mentioning that a meeting was held on March 18, 2009 and in light of the decisions taken in the said meeting, the Finance Department has issued detailed instructions dated March 19, 2009, to all the District Treasury Officers for clearing the refund orders from the treasuries within 48 hours without awaiting instructions from headquarter (R2).
9. In view of the aforementioned factual matrix, we are of the view that the instructions dated November 20, 2008 and March 19, 2009 (R1 and R2 respectively), issued by the respondent-State would produce desirable result, implementing the provisions of the 1948 Act and the Punjab Value Added Tax Act, 2005 in their letter and spirit, which would pave the way for amicable relationship between the entrepreneurs and the establishment. The respondent-State shall remain bound by all the affidavits and instructions. The writ petition stands disposed of.