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TMI Blog1971 (10) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... and 1952-53. That cheque was sent to Calcutta for encashment and encashed at that place. On September 25, 1954, the Assistant Superintendent of Sales Tax passed assessment orders in respect of the years mentioned earlier. According to those orders, the plaintiff was liable to pay sales tax amounting to Rs. 2,803-2-0 in respect of the year 1950-51; Rs. 3,670-5-0 for the year 1951-52; Rs. 4,623-6-0 for the year 1952-53; thus a total of Rs. 11,096-13-0. As seen earlier, it had already paid a sum of Rs. 10,000 earlier. On July 23, 1955, it paid the balance of Rs. 1,096-13-0; this again by a cheque on the bank mentioned earlier. This was also encashed at Calcutta. Aggrieved by the assessment orders made by the assessing authority, the plaintiff went up in appeal to the Assistant Commissioner of Sales Tax, Chhotanagpur Division, Bihar. Those appeals were heard by the appellate authority at Calcutta. The appellate authority by its order of September 24, 1955, allowed the appeals and set aside the orders of assessment. Before that order was made, this court had ruled in Bengal Immunity Co. Ltd. v. State of Bihar [1955] 6 S.T.C. 446 (S.C.); [1955] 2 S.C.R. 603., that until Parliament by l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Validation Act, 1956, is in substance one lifting the ban on taxation of inter-State sales and is within the authority conferred on Parliament under article 286(2) and further that under that provision it was competent to Parliament to enact a law with retrospective operation. Therein this court further held that section 2 of the Sales Tax Laws Validation Act validates not only levies already collected but also authorised the imposition of tax on sales falling within the Explanation which had taken place within the period specified in section 2. It was also held that the Act was not a temporary one though its operation is limited to sales taking place within a specified period. Evidently because of the Sales Tax Laws Validation Ordinance and the Sales Tax Laws Validation Act, the Superintendent of Sales Tax, Dhanbad, did not comply with the demands made by the plaintiff. Thereafter the plaintiff issued to the defendant a notice on June 7, 1958, calling upon the defendant to refund the amount paid by it with interest. The defendant ignored that demand. Then the plaintiff filed a suit on the original side of the Calcutta High Court claiming a sum of Rs. 13,176.69 with interest and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udges of the Division Bench allowed the appeal in full. On the question whether any part of the cause of action arose in Calcutta, differing from the view taken by Ray, J., they held that the doctrine that the debtor must find out his creditor and pay the debt did not apply to the facts of this case because of the rules framed under the Act under which the refund claimed can only be made inside Bihar. But all the same the learned judges came to the conclusion that as the cheques issued by the plaintiff were encashed at Calcutta, part of the cause of action must be held to have arisen in Calcutta; therefore, the Calcutta High Court had jurisdiction to entertain the suit. On merits the learned Judges came to the conclusion that whatever might be the effect of the provisions of the Sales Tax Laws Validation Act, in view of the appellate authority's order allowing the appeals of the plaintiff, whether that order was right or wrong, the defendant was bound to refund the amount. According to the Division Bench, the order of the appellate authority became final as it had not been appealed against nor altered in any manner. It held that the provisions of the Sales Tax Laws Validation Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Sales Tax Laws Validation Act. This section has been given retrospective effect as from April 1, 1951. Therefore we have to proceed on the basis of the fiction that the provisions of the Act relating to levy of tax on inter-State sales have all along been valid provisions. This position is made clear by the decision of this court in Sundararamier's case [1958] 9 S.T.C. 298 (S.C.); [1958] S.C.R. 1422. From the above discussion it follows that if the assessments made by the assessing authority are examined solely on the basis of law, there is no ground for coming to the conclusion that those assessments are invalid assessments. If they are not invalid assessments then the plaintiff's case that he made the payments in question under a bona fide mistake of law is clearly unsustainable. In law, as interpreted by us, he was bound to make those payments. But the complicating factor is the order of the appellate authority. The appellate authority had come to the conclusion that the impugned assessments were not validly made. It is that order that gave the plaintiff right to claim back the amounts paid by it though that order was partly erroneous even when it was made and it became wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f action for the suit on the ground that the plaintiff is entitled to the refund of the amounts paid because of the appellate authority's order. In our judgment the High Court failed to keep apart the two questions, namely, the claim for the return of the amount paid on the basis that it was paid under a mistaken impression of the law and the claim made in pursuance of the order of the appellate authority. The payments made by the plaintiff by cheques have nothing to do with the appellate authority's order. They have not been made on the basis of that order. They were made on the basis of the original assessments. The only ground on which the High Court has come to the conclusion that the plaintiff is entitled to claim refund of the amount paid is because of the fact that the appellate authority had decided the appeals in its favour. Now, let us take up the question whether any part of the cause of action for the suit arose outside Bihar in consequence of the order of the appellate authority. As per rule 40 of the Bihar Sales Tax Rules, 1949, made in pursuance of the rule-making power conferred under the Act, all applications from a dealer for refund of the excess tax paid have to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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