9911796707
TMI Blog1955 (12) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... 185; A.I.R. 1952 All. 764. (2) [1954] 5 S.T.C. 193; A.I.R. 1954 S.C. 459. refund was refused, and the respondent firm filed the petition out of which this appeal arises praying for the issue of a writ of mandamus requiring the Sales Tax Officer, the Commissioner of Sales Tax and the State Government to refund the sum of Rs. 1,365-12-0. Before the learned Judge the liability of the State Government to repay this amount does not seem to have been seriously opposed, and the writ sought for was directed to issue. The opposite parties to the petition now appeal, and it is argued by the Advocate-General on their behalf that the amount in dispute was paid by the respondent firm under a mistake of law and is therefore irrecoverable. The Advocate-General also stated categorically that in this appeal he did not contend that the respondents ought to have proceeded for the recovery of the amount claimed by them otherwise than by way of a petition under Article 226 of the Constitution. The respondent firm contended that the principle upon which the Advocate-General relies has no application in India; it founds its claim on section 72 of the Indian Contract Act which provides that "a person to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is not a person. The object of the Contract Act requires, in my opinion, that the word "person" should have an extended sense, and I have no difficulty in holding that it includes the State Government. The second contention, somewhat tentatively advanced by the Advocate-General, was that section 72 has no application where the mistake under which money has been paid is one of law. That question was considered in Shiba Prasad Singh v. Maharaja Srish Chandra(1). In that case the Privy Council said: "Payment 'by mistake' in section 72 must refer to a payment which was not legally due and which could not have been enforced; the 'mistake' is in thinking that the money paid was due when in fact it was not due." The Advocate-General has invited us to hold that Shiba Prasad Singh's case(1) was wrongly decided on the ground that the opinion of the Judicial Committee as to the meaning of section 72 is in conflict with the provisions of section 21 of the Act. That section provides that, "A contract is not voidable because it was caused by a mistake as to any law in force in British India; but a mistake as to a law not in force in British India has the same effect as a mistake of fact" an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ems to follow the English doctrine. In Willoughby on the Constitution of United States, Volume 1, page 12, it is stated: "The general doctrine that no legal rights or obligations can accrue under an unconstitutional law is applied in civil as well as criminal cases. However, in the case of taxes levied and collected under statutes, later held to be unconstitutional, the taxpayer cannot recover un- less he protested the payment at the time made. This, however, is a special doctrine applicable only in the cases of taxes paid to the State. Thus, in transactions between private individuals, money paid under or in pursuance of a statute, later held to be unconstitutional, may be recovered, or release from other undertakings entered into obtained." (1) [1915] 3 K.B. 106. Professor Willis in his Constitutional Law states that a tax paid under an unconstitutional statute is refundable except when the payment may be considered as voluntary. The Indian doctrine is embodied in section 72 of the Indian Contract Act- "A person to whom money has been paid, or anything delivered by mistake or under coercion, must repay or return it." The section does not make any distinction between a mistake o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 'by mistake' in section 72 must refer to a payment which was not legally due and which could not have been enforced; the 'mistake' is in thinking that the money paid was due when in fact it was not due. There is nothing inconsistent in enacting on the one hand that if parties enter into a contract under mistake in law that contract must stand and is enforceable, but, on the other hand, that if one party acting under mistake of law pays to another party money which is not due by contract or otherwise, that money must be repaid. Moreover, if the argument based on inconsistency with section 21 were valid, a similar argument based on inconsistency with section 22 would be valid and would lead to the conclusion that section 72 does not even apply to mistake of fact." Learned Advocate-General urged two points as against this ruling of the Privy Council: first, that the view expressed in the case was erroneous and second that it did not apply to the case of claim against "the State" as the "State" is not a "person" within the meaning of section 72 of the Indian Contract Act. Whether or not the ruling of the Privy Council is binding on this Court after the commencement of the Constituti ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
