(Civil)
Md Muzammel Hossain CJ
Md Abdul Wahhab Miah J
Syed Mahmud Hossain J
AHM Shamsuddin
Chowdhury J
Commissioner of Customs, Excise and VAT ……….
……….. Petitioner
vs
Appollo Steel Mills Ltd and others……..
…… Respondents
Value Added Tax Act (XXII of 1991)
Section 19(1)
When the application for cancellation of the VAT registration was filed under section 19(1) of the Act, it was the duty of the concerned VAT authority to move in the matter and give his decision. The concerned VAT authority must have remembered that he, being a Government functionary, was duty bound to act as per the dictate of law this way or that way and, for no reason and logic, he could just sit over the matter. .. …. (15)
Judgment September 24th, 2013.
SM Moniruzzaman, Deputy Attorney-General instructed by Sufia Khatun, Advocate-on-Record-For the Petitioner.
Mahmudul Islam, Sr Advocate instructed by Md Zahirul Islam, Advocate-on-Record-For the Respondents.
Judgment
Md Abdul Wahhab Miah J: Delay of 243 days in filing the leave petition is condoned.
2. The Commissioner of Customs, Excise and VAT, Dhaka (North) has filed this petition for leave to appeal against the judgment and order dated the 23rd of April, 2008 passed by a Division Bench of the High Court Division in Writ Petition No. 3951 of 2005 making the Rule absolute.
3. Respondent No.1 as petitioner (hereinafter referred to as the writ-petitioner) filed the said writ petition for issuing a Rule Nisi calling upon the writ-respondents including the petitioner, herein, (the petitioner was respondent No.2) to show cause as to why the order dated 28-10-2004 in Nathi No. CEVT (VAT)-140/2003 (annexure-‘H’ to the writ petition) passed by respondent No.1, the Appellate Tribunal, Customs, Excise and VAT (hereinafter referred to as the Appellate Tribunal) rejecting the appeal of the writ-petitioner preferred against the order of writ-respondent No. 2, the Commissioner, Customs Excise and VAT, Dhaka (North) (hereinafter referred to as the Commissioner) dated 11-8-2003 as contained in Nathi No.3 (9)412-‘C1’ Sheet! Au. & Pre/98/ 343(1) (annexure-‘D’ to the writ petition) as being not maintainable and also setting aside the order dated 11-8-2003 of the Commissioner, shall not be declared to have been passed without lawful authority and were of no legal effect and as to why the writ-respondents shall not be directed to refund Taka 3,44,99,179 being the total standing to the credit of the writ-petitioner as balance in the clurent account register on account of Taka 3,28,22,748 paid as advance VAT and Taka 74,41,658 on account of excess VAT upon cancellation of the writ-petitioner’s VAT Registration Certificate No. 5061001444 dated 17-12-1998, Area Code 50201 under section 19(3) of the VAT Act, 1991. The Rule was issued accordingly.
4. The case of the writ-petitioner was that it is a private company limited by shares and incorporated under the Companies Act, in Bangladesh and was engaged in the manufacture of CI sheets. The writ-petitioner was registered with the Value Added Tax authority, in short, VAT authority. Upon the closure of the mills and stoppage of production since 12-51998, the writ-petitioner on 20-8-1998 made an application to respondent No.3, the Divisional Officer, Customs, Excise and VAT.
5. Tejgaon Division for refund of the balance of current account amounting to Taka 3,95,98,578 deposited from 1-7-1993 to 30-71998. As per decision of the managing authority on 11-9-2000, the writ-petitioner informed the Deputy Commissioner, General Bond, Customs House, Dhaka that it permanently closed down its mills on 4-11-1999 and that there was no stock in its general bonded warehouse. Then by another letter dated 25-11-2001 addressed to respondent No.4, the Superintendent, Customs, Excise and VAT, Tejgaon Circle, the petitioner informed that the production of the Mills was permanently stopped since 4-11-1999 and there were no saleable goods in stock. By another letter dated 29-11-1999, the writ-petitioner also requested the Superintendent to take necessary steps for cancellation of VA’T registration with a formal application in the prescribed form, i.e. ‘Mushak’ 10. Still by’ another letter dated 10-12-2001, the writ-petitioner requested the Superintendent to cancel the registration. After three and half years of submission of said prayers for refund and cancellation of registration made on 20-8-1998, the writ-petitioner received a notice dated 23-4-2003 issued by the Commissioner, informing it that there was no question of balance in the current account for refund rather there were arrears of Taka 3,90,44,058 against the writ-petitioner. After receipt of the notice, the writ-petitioner submitted a detailed reply on 13-5-2003 explaining all the question/issues alleged in the notice.
Then a four member committee was appointed by the VAT authority to consider the prayer of the writ-petitioner for refund. The committee after enquiry submitted its unanimous report on 29-3-2003 to the effect that there was a balance of Taka 2,86,86,793 in the current account of the writ-petitioner and after adjustment with the arrears of Taka 57,66,227, it was found entitled to the tune of Taka 2,29,20,566. Upon receipt of the report and hearing the writ-petitioner, the Commissioner by his letter dated 11-8-2003 informed it that the prayer for refund was allowed to the extent of Taka 34,94,137 only after adjustment with the balance of Taka 3,28,22,748.
6. Being aggrieved by and dissatisfied with the order of the Commissioner, the writ-petitioner preferred an appeal before the Appellate Tribunal. By the order dated 28-10-2004, the Appellate Tribunal rejected the appeal as being premature under rule 34Ka(4) of the VAT Rules, 1991 as the registration of Mushak of the writ-petitioner was not cancelled under the provision of section 19(1) of the VAT Act. The writ-petitioner, finding no other equally efficacious remedy provided by law against the order of the Appellate Tribunal, filed the writ petition.
7. The Rule was contested by the Commissioner (the petitioner herein) and the Divisional Officer (respondent No.3) by filing separate affidavit-in-opposition. (In the paper book, the affidavit-in-opposition filed by the respondents have not been included). However, from the impugned judgment and order, it appears that in the affidavit-in-opposition filed by the Commissioner, he reiterated the facts as stated in the show cause notice dated 23-4-2003. In the affidavit-in-opposition filed by the Divisional Officer, it was stated that the writ-petitioner declared use of 65 kgs of Zinc Ingot per ton in its declaration dated 28-4-1994, the respondents rightly counter claimed Taka 2,30,58,220 which was taken rebate by showing excess use of Zinc Ingot.
8. The High Court Division by the impugned judgment and order made the Rule absolute with cost in the following terms:
“Respondent No.2, the Commissioner is hereby directed to refund Taka (3,28,22,748 – 57,66,227) = 2,70,56,521 to the petitioner within a period of two months of receipt of this order, positively.”
9. Mr SM Moniruzzaman, learned Deputy Attorney-General, appearing for the petitioner, has, in fact, reiterated the same submission as was made before the High Court Division to effect that the VAT authority is always empowered to order for refund of any amount of rebate, which was taken improperly and unauthorizedly over showing use’ of excess Zinc Ingot. He has further submitted that as the VAT registration of the petitioner was not cancelled, it was not entitled to get the refund as prayed for.
10. Mr Mahmudul Islam, learned Counsel, entering caveat on behalf of the writ-petitioner respondent, has, on the other hand, supported the impugned judgment and order.
(To be continued)
11. From the judgment and order of the High Court Division, it appears that it took notice of the facts that the writ-petitioner first made an application on 20-8-1998 for refund of Taka 3,95,98,579 claiming stoppage of production and closure of the mills since 12-5-1998. Thereafter, the mills again commenced production and finally stopped production since 31st August, 2000. On 29-11-2001, the writ-petitioner made an application to the Superintendent for cancellation of VAT registration after closure of the mills since 4-11-1999. On 10-12-2001, the writ-petitioner again wrote to the Superintendent for cancellation of VAT registration, Upon such applications, the writ-petitioner first received a response by way of a show cause notice dated 23-4-2003 issued by the Commissioner claiming that there was no, balance in favour of the writ-petitioner, rather there were arrears of Taka 3,90,44,258. The writ-petitioner by its reply dated 13-5-2003 controverter the claims of the ‘Commissioner and explained its position. There was an enquiry by a four member committee appointed by the VAT authority and said committee found a balance of Taka 2,86,86,793 in the current account and after adjustment with the arrears of Taka 57,66,227, the writ-petitioner was found entitled to the refund of Taka 2,29,20,566. After receipt of the report, the Commissioner heard the writ-petitioner. He however, found the balance, of Taka 3,28,22,748 in the current account in favour of the writ-petitioner. He also found arrears of Taka 57,66,227, rebate of Taka 5,04,064 taken on the stock while tariff was in force and rebate of Taka 2,93,28,611 taken by showing excess use of Zinc Ingot, in total non-refundable rebate of Taka 2,93,28,611. By adjusting the amount with said balance of Taka 3,28,22,748, the Commissioner found that Taka 34,94,137 could be refundable to the writ-petitioner …
12. From the order of the Appellate Tribunal, it appears that it considered everything and also gave finding in favour of the writ-petitioner as to its entitlement to the refund of VAT, but it refused to give the relief to the writ-petitioner and even set-aside the order of the Commissioner which allowed refund of Taka 34,94,137 on the view that VAT registration of the writ-petitioner was not cancelled under Section 19(1) of the VAT Act and therefore, there was chance of commencement of production. The Appellate Tribunal was of the further view that the prayer for refund was premature in view of the provisions of rule 34Ka(4) of the VAT Rules, 1991, the writ-petitioner would be entitled to the refund of the VAT after cancellation of its registration under sub-section (1) of section 19 of the VAT Act. In repealing the said view of the Appellate Tribunal, the High Court Division held that under sub-section (1) of Section 19 of the VAT Act if a-.registered person refrains from production or supply of taxable goods, he shall inform such stoppage to the concerned authority within 14 (fourteen) days and if· the concerned authority is satisfied that there was no unsettled liability then he shall cancel the registration, under sub-section (3) thereof and after such cancellation of the registration, such person becomes entitled to get refund of any balance in, the Current account. The writ-petitioner made the prayers for cancellation of the registration and refund long back, but no steps were taken by the VAT authority for cancellation of registration. In the aforesaid facts and circumstances, registration of the writ-petitioner shall stand cancelled and after the cancellation of registration, the petitioner shall become entitled to refund of the balance in the current account. The High Court Division further held that the VAT authority is authorized to cancel the registration, but the failure of the VAT authority in cancelling the registration, the writ-petitioner could not be held responsible and therefore, the appeal of the writ-petitioner could not be rejected for want of cancellation of registration under rule 34Ka(4) of the VAT Rules, 1991. The High Court Division was also of the view that rule 34Ka(4) of the VAT Rules “appears to be relevant to a case where refund was sought for under Section 67 of the VAT Act.”
13. We have considered the facts as noted by the High Court Division, particularly, the fact that the application for refund of excess VAT was filed by the writ-petitioner as back as on 20-8-1998 claiming stoppage of production and closure of the mills since 12-5-1998 and the further fact that after the mills had commenced its production again, finally it stopped the production since 31st August, 2000 and then again, on 29-11-2001 made an application to the Superintendent for cancellation of the VAT registration after closure of the mills since 4-1-1999. Then again, on 10-12-2001, the writ-petitioner wrote to the Superintendent for cancellation of registration, but the respondents did not take any action on the applications filed by the writ-petitioner. The High Court Division specifically noted in its judgment that” At the time when we hear the matter, there is no dispute with regard to the facts that production in the mills was stopped since 31 August, 2000 and the mills were closed down and there was no stock for sale or disposal since then. The VAT authority has not said that there may be commencement of production in the mill in the future. In its report dated 29-3-2001, the four member committee found the balance in the current account stood at Taka 2,29,20,566 while the Commissioner found the balance at Taka 2,28,22,748 in favour of the petitioner.”
14. There is no dispute that the writ-petitioner made prayers to the concerned respondent under Section 19(1) of the VAT Act for refund upon cancellation of the VAT registration. In the leave petition, it has not been claimed by the Commissioner that the writ-petitioner never commenced its production in the mills after stoppage finally since 31st August, 2000 and that the mills were not closed down and there was stock for sale or disposal since then as specifically observed by the High Court Division.
15. In view of the above, we find no illegality with the High Court Division in making the Rule absolute in the terms as quoted hereinbefore and therefore, no interference is called for with the impugned judgment and order. However, we endorse the observations of the High Court Division that “It may however be mentioned that if the VAT authority may have any justifiable ‘demand against the petitioner, they can raise and get adjudicated the same in accordance with the provisions of the VAT Act. But they cannot adjust any disputed amount, which was never adjudicated under Section 55 of the VAT Act.” We also put our disapproval of the inaction of the concerned VAT authority on record in sitting over the applications filed by the writ-petitioner for cancellation of VAT registration and for fund of their due. It needs to be mentioned that more than 6(six years) 4(four) months elapsed from 29-11-2001 (on which date the writ-petitioner filed the application to the Superintendent for cancellation of VAT registration after closure of the mills finally since 4-1-11999) till the pronouncement of the judgment by the High Court Division, but the application for cancellation of the VAT registration was not disposed of till then. When the application for cancellation of the VAT registration was filed tender section 19(1) of the VAT Act, it was the I duty of the concerned VAT authority to move in the matter and give his decision. The concerned VAT authority must have remembered that he, being a Government functionary, was duty bound to act as per the dictate of law this way or that way and, for no reason and logic, he could just sit over the matter.
With the above observations, this petition is dismissed.