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2014 (9) TMI 341 - HC - VAT and Sales TaxUnjust enrichment - refund of sales tax - Merger / amalgamation - revision proceedings to deny the refund - Transactions of sale and purchase between the two companies were subject to sales tax regime. The assessee accordingly filed returns of tax so paid/collected. By virtue of the subsequent order of the High Court sanctioning the amalgamation scheme and operation of law, such merger related back to the effective date envisaged in the merger scheme. Thus by virtue of such deeming fiction all transactions which took place between the date of the merger scheme and the date of the High Court sanctioning the merger, became those in the nature of branch transfers. - Held that:- even in absence of statutory provisions, in case of indirect taxes, Indian Courts have been applying the principle of unjust enrichment on the premise that collection of tax though may have been declared unlawful, if in the meantime, the assessee had passed on the burden thereof to the consumer, refund of such tax to the assessee would amount to unjust enrichment and such refund, therefore, should not be granted. In the present case, from the available material on record, it is neither possible nor our desire to ascertain as to what extent the burden of tax deposited by the petitioner with the Government authorities was passed on to the third party. Learned counsel for the petitioners strenuously urged that in majority of the cases, transactions were in such a nature that the taxes were paid/collected by the transferor and the transferee-companies and no third party transactions were involved. We are not inclined to go into such an issue. This is so because we propose to permit the Commissioner to hear the revision application on the merits. Secondly, full records are not before us. Thirdly, in such complex situation, we would not like to examine the issue at the first instance which can be better done by the Commissioner in the process of hearing revision application. In the result, subject to the declaration made above, namely, that the order of the High Court sanctioning the amalgamation scheme would relate back to the effective date as envisaged in the scheme and that therefore, the merger should be effective from June 1, 1985, we permit the Deputy Commissioner to proceed further with the pending revision application in accordance with law. While doing so, the question of refund/ adjustment of tax, burden of which is passed on to the third party would also be examined. To the extent it is found that such burden was passed on by the petitioners to the third party, principle of unjust enrichment will apply. However, we clarify that if the transaction was purely between the transferor and transferee-companies with no further repercussions, such a transaction would not come within the principle of unjust enrichment.
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