Law: Sales Tax Act, 1990

Section: 10,10(2)(4),73,45,12

(a) Sales Tax Act (VII of 1990)---Ss. 10(2)(4) & 73---Refund of input tax---Limitation---Claim of refund---Issuance of show cause notice---Taxpayer contended that in case of an objection to refund claim a show-cause notice was to be issued within 14 days of receiving of the refund claim---Show-cause notices were issued after almost one year from the filing of refund claims---Provision of S.10 of the Sales Tax Act, 1990 was a mandatory provision and failure of the department to decide the refund claims within the period, the same could not be rejected and should be deemed accepted---Validity---Refund claims were not processed as required by subsection (2) of S.10 of the Sales Tax Act, 1990 and after almost one year, show-cause notices were issued by raising certain objections as to the admissibility of the refund claims---Subsection (4) of S.10 of the Sales Tax Act, 1990 provides that in case a refund claim seemed to be not admissible, the requirement as to the time limit for processing the claims should not apply till the investigation and verification stood completed---Remittance/price of the exported goods was received by one so called guarantor, then credited to the account of the exporter/registered person---On the face of that, some investigation was required as to why the amount was credited firstly in the name of a guarantor which tantamount to a violation of S.73 of the Sales Tax Act, 1990 providing that payment should have to be made by a cross cheque or pay-order in favour of seller/exporter from the business account of the buyer and in absence of that, the, claim of refund should not be admissible---Once it was shown by the registered person himself of the payment to the guarantor in the refund claims, it became difficult for the department to go by the time schedule laid down in subsection (2) of S.10 of the Sales Tax Act, 1990---As per subsection (4) of S.10 of the Sales Tax Act, 1990 the issuance of show cause notice beyond the period specified in subsection (2) of S.10 of the Sales Tax Act, 1990 did not become a basis for saying that the refund claims should be deemed to have been accepted. (b) Sales Tax Act (VII of 1990)-------Ss. 10(2)…

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