TMI Blog1956 (10) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... sales inside the territory of Bihar. Out of this assessment a sum of Rs. 69,478-2-0 was assessed as tax payable for sales outside Bihar for the period between the 26th of January, 1950, and the 31st of March, 1950. The taxable turnover for this period was Rs. 44,46,662-5-6. The assessment was made by the Superintendent of Commercial Taxes on the 10th of September, 1950. The petitioner duly paid the amount of tax assessed soon afterwards. On the 30th of March, 1953, the Supreme Court pronounced its judgment in State of Bombay v. United Motors (India) Ltd.(1) holding that Article 286(1) of the Constitution, read with the Explanation thereto, prohibited the taxation of sales or purchases involving inter-State elements by all States except the State in which the goods are delivered for the purpose of consumption therein. The effect of this decision was that the petitioner was not liable to pay sales tax with regard to sales outside Bihar for the purpose of consumption in the other State with respect to the period from the 26th of January, 1950, to the 31st of March, 1950. On the 4th of September, 1953, the petitioner applied before the Com- missioner of Sales Tax for a review of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sale or purchase of goods which was being lawfully levied by the Government of any State immediately before the commencement of this Constitution shall, notwithstanding that the imposition of such tax is contrary to the provisions of this clause, continue to be levied until the thirty-first day of March, 1951." Reliance was also placed upon the decision of the Supreme Court in the United Motors' case(1) in which it was held that Article 286(1) of (1) [1953] 4 S.T.C. 133; [1953] S.C.R. 1069. the Constitution, read with the Explanation thereto, prohibited the taxation of sales or purchases involving inter-State elements by all States except the State in which the goods are delivered for the purpose of consumption therein. It was, however, submitted by the Government Pleader on behalf of the respondents that the President has made an order directing that any tax on the sale or purchase of goods which was being lawfully levied by the Government of any State immediately before the commencement of the Constitution shall continue to be levied until the 31st day of March, 1951, notwithstanding the bar of Article 286(2) of the Constitution. The order of the President was made under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce a transaction of sale is deter- mined to be an outside sale because of the legal fiction created by the Explanation to Article 286(1)(a), the ban imposed by the Article is immediately directed to that transaction and that ban cannot be lifted or removed by the President's Continuance Order. I, therefore, hold that the Government Pleader has failed to make good his submission on the point. I think the imposition of sales tax continues to be illegal so far as inter-State transactions are covered by the Explanation to Article 286(1)(a) of the Constitution. The same view has been expressed by the Supreme Court in Ram Narain Sons Ltd. v. Assistant Commissioner of Sales Tax and Others(2). But the difficulty is that the order of the Sales Tax Officer in the present case does not show, on the face of it, whether the amount of Rs. 69,478-2-0 was assessed as sales tax with regard to the transactions of sale of goods which were consumed in the State of first destination. The order of the Sales Tax Officer is the second annexure to the application. In this order the Sales Tax Officer merely says "sales amounting to Rs. 1,92,08,554-11-0 were made to addressees outside Bihar". In paragraph ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsumption therein? Then, such sale or purchase shall be deemed to have taken place in that State and outside all other States. The latter States are prohibited from taxing the sale or purchase; the former alone is left free to do so." I am, therefore, of the opinion that in the present case the petitioner is exempted from the payment of tax only if there is proof that the goods were delivered and consumed in the State of first destination. I further hold that the sales would not be exempted if the goods are not consumed in the State of first destination but they are re-exported from the State of first destination to other States. In my opinion the proper direction in this case would be that the order of the Sales Tax Officer dated the 10th of September, 1950, should be set aside and that the matter should go back to the Sales Tax Officer to make re-assessment of sales tax upon the petitioner according to law for the period in question. I think there should also be a direction upon the respondents calling upon them to refund to the petitioner so much of the tax as has been paid by the petitioner in excess of the amount of re-assessment to be now made by the Sales Tax Officer. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t upon the ground that payment was made under a mistaken notion of law. In this respect the position in Indian law is different from the English law. It is well settled in the English law that the money paid under a mistake of law cannot be recovered in an action for money had and received, but money paid under a mistake of fact may be recovered. The position in Indian law is markedly different. The Indian doctrine is embodied in section 72 of the Indian Contract Act which states: "A person to whom money has been paid, or anything delivered by mistake or under coercion, must repay or return it." There was a difference of opinion between the Indian High Courts as regards the interpretation of this section, but it has now been (1) 56 L.J.Q.B. 457. (2) 155 E.R. 1502. authoritatively held by the judicial Committee in Sri Sri Shiba Prasad Singh v. Maharaja Srish Chandra Nandi(1) that the word "mistake" in section 72 of the Indian Contract Act includes a mistake of law and that money paid under a mistake of law could be recovered and that section does not conflict with the provisions of section 2i of the Indian Contract Act. At pages 253-54 Lord Reid states: "If a mistake of law has le ..... X X X X Extracts X X X X X X X X Extracts X X X X
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