The Bombay High Court disallowed the Sales Tax Refund and Interest made beyond Limitation Period.
The petitioner sought to direct the respondent, Commissioner of Sales Tax, Maharashtra State, to grant refund and interest to the tune of Rs.95,42,187/-. The petitioner prayed for a declaration that the rejection order of refund for the first quarter of the period 2009-2010 is non-est and void as it is not served on the petitioner till date.
The respondent has contended that the Petition suffers from delay and laches.
In justification of the stand that the Petition does not suffer from delay and laches, the petitioner submitted that as the order refusing refund was never served on the petitioner, this Petition does not suffer from delay and laches. The petitioner is a dealer registered under the Maharashtra Value Added Tax Act, 2002 in the business of trading and manufacturing of textile fabrics. Their sale was exempted under the MVAT. The materials purchased for the purpose of manufacturing fabrics constituting inputs are taxable, as such, the petitioner’s assessment usually resulted in the claim of sizable refunds at each of the financial years.
The division bench headed by Chief Justice Deepankar Datta and Justice M.S.Karnik held that the Court may consider the delay unreasonable even if it is less than the period of limitation prescribed for a civil action for the remedy but where the delay is more than this period, it will almost always be proper for the court to hold that it is unreasonable. The period of limitation prescribed for recovery of money paid by mistake under the Limitation Act is three years from the date when the mistake is known.
“We are therefore of the view that the petition being in the nature of a money claim, it does not appear that the petitioner has exercised due diligence and invoked the writ jurisdiction with utmost promptitude,” the court said.
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