2020-VIL-344-GUJ

VAT High Court Cases

Central Sales Tax, 1956 - Refund of the excess CST paid mistakenly – whether the assessee is eligible for refund of CST paid by it contrary to the provisions of Section 9A of the CST Act or whether the Revenue was entitled to forfeiture of the excess central sales tax deposited by the assessee - Validity of Tribunal order holding that the assessee is eligible for refund of excess amount of CST deposited over and above, the amount of Central Sales Tax payable under Section 9A of the CST Act, 1956 and the same cannot be forfeited under Section 9(2) of the CST Act, 1956 – applicability of Apex Court decision in the case of Mafatlal Industries Ltd – HELD - when the assessee has sold the goods on the price, which is inclusive of tax, the turnover is to be calculated as per the formula provided in Section 8A of the CST - the assessee deposited the CST at the rate of 10%/12.5% by making reverse working of the turnover under Section 8A of the CST Act, whereas the rate of CST applicable for the goods supplied by the assessee was 4%. The correct amount of tax payable would be therefore, much less than what the assessee has deposited resulting in excess amount of tax - since the assessee cannot be said to have collected the CST at the rate of 10% or 12% from its buyers/receiver of the goods in view of the contract of fixed price, there is no question of passing over the same to its buyer in view of the decisions of the Apex Court in the case of Mafatlal Industries. Even otherwise the provisions of the CST Act do not contemplate any power to forfeiture of refund by the Revenue - in the absence of any power with the Revenue to forfeit such excess tax, the assessee is entitled to refund of the same – authorities are directed to issue refund order in favour of the assessee - the questions of law are answered in favour of the assessee and against the Revenue

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