JUDGMENT
R.K. Agrawal, J.
1. By means of the present writ petition filed under Article 226 of the Constitution of India, the petitioner M/s. B.K. Enterprises seeks the following reliefs:
(i) to issue a writ, order or direction in the nature of writ of certiorari quashing Section 29(2) of the Trade Tax Act as un-reasonable, arbitrary because it is violative of Article 14 of the Constitution of India.
(ii) to issue a writ, order or direction, directing the respondent No. 2 to allow the interest from the date of deposit.
(iii) in alternative issue a writ, order or direction directing the respondent No. 2 to pay interest of Rs. 1,03,355.00 from the date of the assessment order dated 18.11.1995 and on the balance amount from the date of the order of the Tribunal dated 17.10.1996.
(iv) to issue a writ, order or direction, which this Hon’ble Court may deem fit and proper in the circumstances of the case;
and
(v) to award the cost of the petition to the petitioner.
2. Briefly stated the facts giving rise to the present petition are as follows.
3. According to the petitioner, it is a registered dealer under the provisions of the U.P. Trade Tax Act, 1948, hereinafter referred to as “the U.P. Act” and Central Sales Tax Act, 1956, hereinafter referred to as “the Central Act”. It is engaged in the business of sale of coal. The petitioner imports coal against declaration Form 31. For obtaining Form 31, the petitioner was required to deposit cash security which was subject to adjustment at the time of assessment from the tax which may be found payable by the petitioner. For the Assessment Year 1993-94, the petitioner claims to have deposited a sum of Rs. 5,63,740/- by way of cash security at the time of taking of Form 31 as also at the Check Post. The Assistant Commissioner (Assessment-II), Trade Tax, Gorakhpur, respondent No. 2, who is the Assessing Authority of the petitioner, passed the assessment order on 18th November, 1995 in which he levied the tax of Rs. 3,12,400/-. As against the deposit of Rs. 5,63,740/- claimed by the petitioner, respondent No. 2 allowed credit of only Rs. 4,15,755/- and directed for the refund of excess amount of Rs. 1,03,355/-. The benefit of the remaining amount was not given to the petitioner for want of verification. The matter was carried on in appeal and ultimately the Trade Tax Tribunal vide order dated 17th October, 1996 reduced the amount of tax assessed at Rs. 1,95,960/-. According to the petitioner, pursuant to the order of the Tribunal, dated 17th October, 1996 it became entitled for refund of Rs. 1,03,355/- initiated proceedings under Section 22 of the U.P. Act on the ground that the credit of amount deposited at the check post has wrongly been allowed and is liable to be withdrawn. Vide order dated 22nd April, 1997 the direction for refund was withdrawn by respondent No. 2 and an additional demand was also created. The petitioner feeling aggrieved by the order dated 22nd April, 1997 carried the matter in appeal and second appeal before the Statutory authorities and ultimately the Deputy Commissioner (Appeals), Trade Tax, Basti, vide order dated 21st April, 1999 had set aside the order dated 22nd April, 1997. Pursuant to the order dated 21st April, 1999, the petitioner was granted refund/adjustment of Rs. 2,13,795/-. According to the petitioner it is also entitled for the refund of Rs. 1,47,985/- and interest. The validity of the provisions of Section 29(2) of the U.P. Act which provides for payment of interest only in the event if the refund is not paid within three months from the date of receipt of the order of refund by the Assessing Authority has been challenged on the ground that the the same is wholly arbitrary and unconstitutional.
4. In the counter affidavit filed by S.P. Rai, Assistant Commissioner (Assessment-II), Trade Tax, Gorakhpur, respondent No. 2, it has been stated that the refund/adjustment of the entire amount, which has been found to have been deposited in excess, was given within 90 days from the receipt of the order dated 21.4.1999 passed by the Deputy Commissioner (Appeals) and therefore, no interest is payable. It has also been stated that the credit has been given to the amount claimed to have been deposited for which proof has been giver by the petitioner. It has further been stated that as per the assessment order dated 18th November, 1995 wherein the refund of Rs. 1 03,355/-became due and payable to the petitioner a refund voucher was issued on 13th February, 1996 but it was not received by the petitioner However, upon passing of the order under Section 22 of the U.P. Act on 22nd April, 1997 the excess amount deemed to have been deposited was treated as non adjustable on account of security having been deposited at the check post and further a demand of Rs. 1,43,406/- was created which order has been set aside by the Deputy Commissioner(Appeals) and the entire amount which was found to be refundable has been refunded/adjusted to the petitioner within the stipulated period. In the rejoinder affidavit filed by the petitioner, the plea taken by it in the writ petition has been reiterated.
5. A supplementary counter affidavit has also been filed in which details of the tax payable, the amount deposited and refunded/adjusted have been given. A supplementary rejoinder affidavit has been filed by the petitioner claiming interest.
6. We have heard Sri Kunwar Saxena, learned Counsel for the petitioner and Sri M.R. Jaiswal, learned Standing Counsel appearing for the respondents.
7. Sri Saxena, learned Counsel for the petitioner submitted that the petitioner was entitled for interest on the delayed refund. According to him in the original assessment order dated 18th November, 1995, a sum of Rs. 1,03,355/- had been found to have been deposited in excess. The amount has been refunded/adjusted only in the year 1999 i.e. much beyond the period of three months. He further submitted that the order passed under Section 22 of the U.P. Act having been set aside in appeal, it would be deemed that the said order did not exist in the eyes of law. The alleged mistake, which was rectified by the order passed under Section 22 of the U.P. Act would be deemed to be non existent where the rectified order has been set aside in appeal and therefore, the period of three months to be counted from the date of the assessment order itself and not from the order passed by the Deputy Commissioner (Appeals). He has placed reliance on a decision of the Division Bench of this Court in the case of Technical Construction Co., Muzaffarnagar v. Trade Tax Officer, Sector-I, Muzaffarnagar and Ors. 2006 UPTC 1378.
8. In reply Sri M.R. Jaiswal, learned Standing Counsel, submitted that the original assessment order dated 18th November, 1995 having been rectified under Section 22 of the U.P. Act by which in place of refund of the excess amount a demand was created, the petitioner was not entitled for any refund and the refund became due only after the rectification order under Section 22 of the U.P. Act has been set aside in appeal by the Deputy Commissioner (Appeals). The respondent No. 2 having refunded/adjusted the entire excess amount within the stipulated period of three months, the question of payment of interest does not arise.
9. Even though in the present writ petition, the validity of Section 29(2) of the U.P. Act has been challenged yet no serious arguments have been advanced on it and therefore we are not going into the question of validity of Section 29(2) of the U.P. Act.
10. We have given our anxious consideration to the various pleas raised by the learned Counsel for the parties. We find that it is not in dispute that in the original assessment order dated 18th November, 1995,a sum of Rs. 1,03,355/- had been found to have been deposited in excess which was refundable to the petitioner. However, in exercise of the power under Section 22 of the U.P. Act, the respondent No. 2 had passed the rectification order on 22nd April, 1997 withdrawing the adjustment of the amount deposited as security at the check post and creating a demand of Rs. 1,43,406/- in place of Rs, 1,03,355/ ordered earlier. The order dated 22nd April, 1997 was carried in appeal before the Deputy Commissioner (Appeals), Trade Tax, Gorakhpur, who vide order dated 17th November, 1997 had set aside the order passed under Section 22 of the U.P. Act and remanded the matter for passing the order afresh. The order dated 17th November, 1997 had been challenged in appeal by the petitioner before the Trade Tax Tribunal, Gorakhpur under Section 10 of the U.P. Act and the Tribunal vide order dated 18th June, 1998 had set aside the same and remanded the matter to Deputy Commissioner (Appeals), Trade Tax, Gorakhpur for deciding the same on merits. Pursuant to the aforesaid direction, the Deputy Commissioner (Appeals), Trade Tax, Gorakhpur had allowed the appeal and set aside the order passed under Section 22 of the U.P. Act. Thus, for the first time the petitioner became entitled for refund of excess amount in terms of the order dated 21st April, 1999 passed by the Deputy Commissioner (Appeals), Trade Tax, Gorakhpur. It is not in dispute that the excess amount has already been adjusted/refunded in the year 1999 within the stipulated period of three months as provided under Sub-section (2) of Section 29 of the U.P. Act. Till 21st April, 1999 i.e. before the Deputy Commissioner (Appeals), Trade Tax, Gorakhpur had set aside the rectification order, the petitioner was not entitled for any refund. The submission that the moment rectification order has been set aside in appeal it would be deemed that there was to mistake in the original order and the petitioner became entitled for refund from the date of the assessment order is misconceived. It is one thing to say that there was no mistake apparent in the assessment order and another for claiming interest on refund. The refund coupled with payment of interest is governed by the statutory provisions made in this behalf under Section 29 of the UP. Act. Sub-section (2) of Section 29 of the U.P. Act provides that if the refund is not granted within three months from the date of the receipt of the order of refund then the liability for payment of interest would arise. As in the present case, we find that the petitioner became entitled for refund only upon passing of the order dated 21st April, 1999 by the Deputy Commissioner (Appeals), Trade Tax, Gorakhpur, the interest, if any, would accrue only if the same has not been paid within three months from the date of the receipt of the order by the Assessing Authority. As in the present case the excess amount has already been refunded/adjusted will within the period of three months, the petitioner is not entitled for interest. Reliance placed by the learned Counsel for the petitioner on the case of Technical Construction Co., Muzaffarnagar (supra) is wholly misplaced as the point in issue in the aforesaid case was entirely different. Even though the aforesaid decision related to refund under Section 29 of the U.P. Act and liability for payment of interest under Sub-section (2) of Section 29 of the U.P. Act yet the facts were entirely different in that case from the facts of the present case inasmuch as the question from which date refund would be due was not up for consideration therein.
11. In view of the foregoing discussion, we do not fine any merit in the writ petition. It is dismissed accordingly.