' Through this order, we intend to dispose of above captioned appeal which has been filed by a taxpayer, arises out of Order-in-Appeal No,58 of 2010, dated 17-3-2010.
2. The relevant facts in brief are that the appellant claimed obtained refund of input tax amounting to Rs,10,82,400 against four invoices of the registered persons, which were declared black listed/ suspended units. The department issued notice dated 26-12-2008, calling upon the appellant to show cause as to why input tax illegally received may not be recovered in terms of sections 11(2) and 36(1) of the Sales Tax Act, 1990, read with relevant Rules of the Sales Tax Refund Rules. The charges leveled in the show-cause notice were vehemently contested by the taxpayer, but the Adjudicating officer vide impugned Order-in-Original No,120 of 2009, had ordered for recovery of Rs,10,82,400. Being aggrieved, the taxpayer assailed the orders-in-original before the Collector (Appeals) who vide impugned order upheld the order-in-original .
3. Heard both the sides at length and perused the record. The learned AR on behalf of taxpayer stated that refund obtained by the taxpayer was ordered to be recovered on the grounds that the supplier units were declared suspect by the department. In this regard, it is contended by the learned AR that the authorities below have failed to consider the fact that at the material time when the transactions were made the status of the, suspect units was not black listed. Furthermore, it is submitted by the learned AR that the show cause notice was time barred as the time period pertains to April, 2005 whereas the show cause notice was issued on 26-12-2008.
4. The learned DR on behalf of revenue has failed to rebut the above submissions of the learned AR.
However, he simply supported the orders passed by the authorities below.
5. We have looked into the matter and after due consideration, we are convinced with the arguments put-forth by the learned AR. Admittedly the tax period involved in the case is April, 2005, whereas the show-cause notice was issued by the Department was on 26-12-2008, which is clearly barred by time as provided in section, 36(2) of the Sales Tax Act, 1990. Here, we deem it necessary to reproduce the relevant section 36(2), for the sake of ready reference:-- "36(2) Where, by reason of any inadvertence, error or misconstruction, any tax or charge has not been levied or made or has been short-levied or has been erroneously refunded, the person liable to pay any amount of tax or charge or the amount of refund erroneously made shall be served with a notice, within three years of the relevant date, requiring him to show cause for payment of the amount specified in the notice".
6. Furthermore, the supplier unit at the material time was not declared as suspect, therefore, the invoices issued by the unit during the intervening period are acceptable. Here, we are strengthened by the Sales Tax General Order No,6 of 2003, dated 20-12-2003, wherein it was laid down that:-- "(iii) Unless the Collector specifies otherwise, such orders shall have effect from the date of original blacklisting or suspension of registration/enrolment of the concerned person, so that invoices issued by him during the intervening period are acceptable"
7. Learned Tribunal in a case while deciding the similar issue in S.T.A. No 789/LB/2009 dated, 11-8- 2010, has held that:-- "After considering the above-referred provisions of law, I am of the view that both the officer below have not considered this legal aspect of the case. Even otherwise, on behalf of the appellant, the Sales Tax General Order No,6 of 2003, bearing C. No,5 (147)ST-Int.Audit/2002 dated 20-12-2003 issued by the C.B.R. (Sales Tax Wing) has been placed before this Bench by learned Counsel of the appellant wherein in Para-2 which is regarding removal from blacklisting or suspension lists and under this Head in Clause (iii) it has been said that unless the Collector specifies otherwise, such orders shall have effect from the date of original blacklisting of suspension of registration/enrolment of the concerned person, so that invoices issued by him during the intervening period are acceptable. Learned Counsel has contended that the invoices are from the two companies referred by the officers below which were not blacklisted when the supplies were made. In view of the above facts, circumstances and the legal position, I find no justification for refusing the refund claim of the appellant. The impugned orders of both the officers are set aside and the appeal filed by the appellant-registered person is allowed".
8. In view of what has been stated/discussed herein above, particularly, in the light of law cited above, we are inclined to hold that the orders of the authorities below are suffering from grave legal infirmities which are vacated and accordingly set aside.
' Appeal of the taxpayer succeeds as prayed for and disposed of in the manner and to the extent as dilated supra.