JUDGMENT
G. Sivarajan, J.
1. The scope of Notification S.R.O.No. 365/1993 giving retrospective effect to Notification S.R.O. No. 1401/1992 issued under Section 10 of the Kerala General Sales Tax Act, 1963 (for short ‘the Act’) arises for consideration in this case. The assessee is the petitioner. The State is the respondent. The assessment year concerned is 1992-93.
2. The assessee is, inter alia, engaged in the sale of goods received by branch transfer from outside the State. In the assessment for the year 1992-93 the assessing authority levied turnover tax at 0.5 per cent on the turnover of goods received on branch transfer from outside the State under Section 5(2A)(g) of the Act. This is, inter alia, challenged by the assessee in appeal before the Appellate Assistant Commissioner. The appeal was dismissed by upholding the order of the assessing authority on this question. The Tribunal, in further appeal filed by the assessee, considered the question whether the assessee is liable to pay turnover tax under Section 5(2A)(g) of the Act on the turnover of goods received from outside the State on branch transfer. Relying on the Division Bench decision of this Court in Assistant Commissioner (Assessment), Sales Tax v. Associated Cement Companies Ltd. ((1998) 108 STC 219) it was held that the assessee is not liable to pay turnover tax on the turnover of goods received from outside the State on branch transfer. It was further held, in the light of the decision of this Court in Apar Ltd. v. Assistant Commissioner and Anr. ((2000) 8 KTR 363 (Ker.)) that the assessee is entitled to get refund of the tax paid for the period after 29th October, 1992. However, it was held that the assessee is not entitled to get refund of the turnover tax paid for the period from 1st April, 1992 to 29th October, 1992.
3. The only question that arises for consideration in this case is as to whether the order of the Tribunal refusing to direct refund of the turnover tax paid for the period from 1st April, 1992 to 29th October, 1992 is legal and valid. This will depend on the interpretation of the expression “provided that the turnover tax, if any, paid shall not be refunded” occurring in S.R.O. No. 365/93.
4. Learned Counsel appearing for the petitioner submits that though turnover tax is payable under Section 5(2A)(i)(g) of the Act, by virtue of Notification S.R.O. No. 1401/1992 dated 27th October, 1992 and the decision of the Division Bench of this Court in Assistant Commissioner (Assessment) v. Associated Cement Companies Ltd. (1997 KLJ (Tax Cases) 265) the assessee is entitled to exemption from payment of turnover tax on the turnover relating to goods received on branch transfer also. The Counsel also submitted that since the Government by S.R.O. No. 365/1993 has given retrospective effect to Notification S.R.O. No. 1401/1992 with effect from 1st April, 1992, the assessee is not liable to pay turnover tax on the turnover of goods received by way of branch transfer from 1st April, 1992 onwards and consequently the assessee is entitled to get refund of the turnover tax paid for the period from 1st April, 1992 onwards. The Counsel further submitted that in the instant case the assessee had paid the tax for the period from 1st April, 1992 till 29th October, 1992 only after the date of issue of Notification S.R.O. No. 365/1993. The Counsel on that basis submits that the proviso in Notification S.R.O. No. 365/1993 mentioned above does not apply to the case on hand. The Counsel also relied on the decision of this Court in Apar Ltd.’s case (supra) in support.
5. Learned Special Government Pleader (Taxes) appearing for the respondent, on the other hand, submits that by virtue of the decision of the Division Bench of this Court in Associated Cement Companies’ Ltd.’s case (supra) the assessee is also entitled to the benefit of tax exemption provided under S.R.O. No. 1401/1992 but the refund of tax paid for the period from 1st April, 1992 to 29th October, 1992 by virtue of the restrospective operation given to S.R.O. No. 1401/1992 by S.R.O. No. 365/1993 can be availed only subject to the proviso to S.R.O. No. 365/1993. The Special Government Pleader further submitted that since the assessee had already paid the turnover tax for the period from 1st April, 1992 to 29th October, 1992, the said amount cannot be refunded in view of the proviso which says that turnover tax already paid shall not be refunded. The Special Government Pleader submitted that the decision of the Division Bench relied on by the Counsel for the assessee has application only in respect of the tax paid for the period after 29th October, 1992. The Special Government Pleader thus submits that the Tribunal was perfectly justified in refusing to order refund of the tax paid for the period from 1st April, 1992 to 29th October, 1992.
6. Now there is no dispute that the assessee is also entitled to the benefit of Notification S.R.O. No. 1401/1992 with retrospective from 1st April, 1992 by virtue of S.R.O. No. 365/93. So far as the retrospective operation of S.R.O. No. 1401/92 with effect from 1st April, 1992 a rider is provided in the Notification S.R.O.No. 365/93. The said rider, as already noted, is that the turnover tax, if any, paid shall not be refunded. The Tribunal in the instant case has ordered refund of the tax paid for the period from 29th October, 1992. However, the Tribunal refused to order refund for the prior period for the reason that the assessee had already paid the tax due for the period prior to 29th October, 1992 which attracted the proviso to Notification S.R.O. No. 365/93.
7. Thus the issue now narrows down to the scope of the proviso to S.R.O. No. 365/93. As already noted, S.R.O. No. 365/93 gives retrospective effect to Notification S.R.O. No. 1401/92 with effect from 1st April 1992. As per the decision of this Court, the assessee is not liable to pay turnover tax even on the turnover of goods received by branch transfer. However, the proviso to the said Notification says that the turnover tax, if any, paid shall not be refunded. Admittedly, the assessee had paid the turnover tax for the period from 1st April, 1992 to 29th October, 1992. According to the assessee the turnover tax for the said period was paid only subsequent to the date of Notification S.R.O. No. 365/93. No material is available on record to show the date of payment of the turnover tax for the period from 1st April, 1992 to 29th October, 1992.
8. Thus the question to be considered is as to whether a dealer who has paid the turnover tax in respect of goods received by branch transfer for the period from 1st April, 1992 to 29th October, 1992 is entitled to the benefit of S.R.O. No. 1401/92 for the period from Ist April, 1992 to 29th October, 1992 by virtue of Notification S.R.O. No. 365/93. The proviso to Notification S.R.O. No. 365/93 only says that the turnover tax paid shall not be refunded.
9. M/s. Apar Limited, a company similarly situated inter alia challenged the proviso to Notification S.R.O. No. 365/93 providing that the turnover tax, if any, paid shall not be refunded as discriminatory. The Single Bench, presided by one of us (Sivarajan, J.) observed as follows:
“………………..Since Ext.P2 notification applies to all dealers without any discrimination, by virtue of the decision of the Division Bench mentioned above, there is no question of any discrimination warranting interference by this Court with the said notification. Though it would, prima facie, appear that there is a discrimination between two sets of persons, (1) those who pay turnover tax as per the amended provisions of Section 5(2A)(i)(g) without any demur and (2) those who have not paid tax in accordance with the said provision will amount to giving a premium to persons who dodged the payment of tax, there is no justification for striking down the said notification on that ground since all those persons, who have paid tax in accordance with the amended provisions of the Act, might have taken into account the said payment while fixing the price structure of the commodity dealt with by them. This is so, in spite of the fact that the amount of turnover tax cannot be passed on to the purchasee. Accordingly, I hold that there is no merit in the submission of the learned Counsel appearing for the petitioner that Ext.P2 notification in so far as it provides that the turnover tax, if any, paid shall not be refunded, is confiscatory in nature and violative of Articles 14 and 19 of the Constitution of India…………….”
The claim for refund of the tax was thus rejected.
10. M/s Apar Limited took up the matter in appeal before the Division Bench and the decision is reported as Apar Ltd. v. Assistant Commissioner and Anr. ((2000) 8 KTR 363). The Division Bench noted that the second prayer was with regard to the refund of the amount of tax already collected. The Division Bench observed as follows:
“………………….In this connection, it is to be noted that Ext.P2 notification is dated 9th March, 1993. Ext.P1 notification is dated 29th October, 1992. So, after 29th October 1992, those persons who were exempted under Ext.P1 were not bound by law to pay turnover tax. Learned Counsel for the petitioner contended that his client is also entitled to get the benefit of Ext.P1 from 29th October, 1992 in so far as it has now been held that the exclusion from Ext.P1 notification of persons like the petitioner is unconstitutional. In Ext.P2, there is a proviso that the turnover tax paid, shall not be refunded. That was why by Ext.P2, Ext.P1was brought into force from 1st April, 1992, whereas, Ext.P1 is dated 29th October, 1992. So, from 1st April, 1992 upto 29th October, 1992 all the dealers including those who were exempted under Ext.P1, were paying turnover tax. Thus, the petitioner cannot claim any refund of tax prior to 29th October, 1992.”
11. The Division Bench considered the question whether the petitioner is entitled to refund of the turnover tax paid after the date of Ext.P1 notification and observed that the Single Bench declined to grant the relief on the ground that Ext.P2 notification applied to all dealers without discrimination. It was also noted that the Single Bench observed that those who have paid the tax might have taken into account the said payment while fixing the price schedule of the commodity dealt with by them. The Division Bench did not agree with the view of the Single Bench with respect to the period after 29th October, 1992. It was observed that upto 29th October, 1992 turnover tax was collected legally but after that it was collected illegally. The Division Bench also noted the following observation of the Supreme Court in Mafatlal Industries Ltd. v. Union of India ((1997) 5 SCC 536) at page 632:
“A claim for refund, whether made under the provisions of the Act as contemplated in proposition (i) above or in a suit or Writ Petition in the situations contemplated by proposition (ii) above, can succeed only if the petitioner/plaintiff alleges and establishes that he has not passed on the burden of duty to another person/other persons. His refund claim shall be allowed/ decreed only when he establishes that he has not passed on the burden of the duty or to the extent he has not so passed on ………”
12. The Division Bench then observed that thus the petitioner is entitled to refund, if he has shown that he has not passed on the burden of the duty to a third person. Thus the Division Bench decision in Apar Ltd.’s case (supra) is authority for the following propositions:
(i) Petitioner is not entitled to get refund of the turnover tax paid for the period from 1st April, 1992 to 29th October, 1992 in view of the proviso to Notification S.R.O.No. 365/93. (ii) In order to get refund of the tax paid petitioner has to establish that he has not passed on the burden to a third person. 13. The case of the petitioner, as already noted, is that the petitioner had paid the turnover tax due for the period from 1st April, 1992 to 29th October, 1992 only after Notification S.R.O. No. 365/93 and therefore the tax paid subsequently will not attract the proviso. 14. The Division Bench, as already noted, drew a distinction between tax legally paid for the period from Ist April, 1992 to 29th October, 1992 and the tax illegally paid for the subsequent period. This is the reason for rejecting the claim for refund of the tax period upto to 29th October 1992 in view of the proviso to Notification S.R.O. No. 365/93. The same reasoning would apply in this case also.
15. That apart, the only case of the petitioner is that the tax due for the period upto 29th October, 1992 was paid under protest and therefore it has to be refunded. The second proposition of the Division Bench applies and unless the petitioner alleges and establishes, that it has not passed on the burden of tax to another, refund cannot be ordered. The petitioner had not alleged or established these matters before any of the authorities including the Tribunal. In these circumstances, we do not find any illegality in the order passed by the Tribunal.
There is no merit in this revision. It is accordingly dismissed.
