TMI Blog1973 (5) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... ount was included in the turnover of the assessee and was subjected to tax by the order of assessment dated 14th June, 1965. The amount of tax imposed on this amount came to Rs. 6,692.62. In the year 1962-63, the turnover in respect of payment received for the supply of railway wagons was assessed at Rs. 36,74,055 and the tax imposed by the assessment order dated 19th June, 1965, was Rs. 73,481.10. In the year 1963-64, the turnover assessed was Rs. 93,90,376 and the tax assessed by the order dated 30th March, 1966, was Rs. 1,87,607.52. In the year 1964-65, the turnover was assessed at Rs. 1,34,43,604 by the assessment order dated 31st October, 1966, and the tax imposed came to Rs. 2,68,872.08. In the year 1965-66, the turnover was taxed at Rs. 1,33,72,816 and the tax assessed came to Rs. 2,67,456.32 as per assessment order dated 30th September, 1967. In the year 1966-67, the turnover in respect of this item was Rs. 93,54,422 and the tax assessed by the assessment order dated 23rd January, 1968, amounted to Rs. 1,87,088.44. The assessee did not prefer any appeal against these orders. It appears that the sales tax paid by the assessee had been recovered by it from the railways. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... similar provision in the contract of the assessee. The assessee thereafter preferred revisions against the orders of the Sales Tax Officer. These revisions were dismissed by a common order dated 22nd December, 1972. It was urged before the revising authority that the assessee had filed copies of the contract and indemnity bond relating to the contract, and as such there was an error apparent on the face of the record, which required rectification. The revising authority found as a fact that the contract and indemnity bond were not filed during the course of assessment proceedings, but were filed during the proceedings under section 22 of the Act. It, accordingly, held that, in view of this, it could not be said that there was any error apparent on the face of the record as contemplated by section 22 of the Act, and as such the application was rightly rejected. None of these two authorities gave any reasons for rejecting the claim for refund. The petitioner, thereafter, filed the present petitions, and has prayed for quashing of the assessment orders in so far as they relate to the imposition of sales tax on payments received in respect of the supply of railway wagons, and also for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly of such amounts as were not barred under section 14 of the Orissa Sales Tax Act. That provision is in pari material with section 29 of our Sales Tax Act, and imposes a limitation of twenty-four months for claiming refund of tax. Before the Supreme Court, it was contended that section 14 of the Act which imposed a period of limitation for refund of tax was ultra vires. This contention was repelled. It was, however, held that the High Court can in a petition under article 226 of the Constitution direct payment of money against the State, or against an officer of the State, to enforce a statutory obligation, and inasmuch as in the petition, the assessee had claimed for the enforcement of a statutory obligation imposed under section 14 of the Act, the petition was maintainable, but it could only be allowed subject to the restriction or the limitation contained in section 14 of that Act. The question as to whether the assessee had a right to recover the balance of tax, which was barred by limitation under statute, by way of suit was left unanswered. In the case of State of Madhya Pradesh and Another v. Bhailal Bhai[1964] 15 S.T.C. 450 (S.C.); A.I.R. 1964 S.C. 1006., sales tax was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntainable under article 226 of the Constitution; and secondly, whether a writ of mandamus could issue for refund of money collected prior to coming into force of the Constitution. The court considered its two earlier decisions in Sri Satya Narain Singh v. District Engineer, P.W.D., BalliaA.I.R. 1962 S.C. 1161. and Burmah Construction Co. v. State of Orissa[1961] 12 S.T.C. 816 (S.C.); A.I.R. 1962 S.C. 1320. , and observed on page 1742 as under: "(6) On the first point, we are of opinion that though the High Courts have power to pass any appropriate order in the exercise of the powers conferred under article 226 of the Constitution, such a petition solely praying for the issue of a writ of mandamus directing the State to refund the money is not ordinarily maintainable for the simple reason that a claim for such a refund can always be made in a suit against the authority which had illegally collected the money as a tax. We have been referred to cases in which orders had been issued directing the State to refund taxes illegally collected, but all such cases had been those in which the petitions challenged the validity of the assessment and for consequential relief for the return of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icle 286(1)(a) of the Constitution. The petitioner had based his claim for refund on a mutual mistake, and had filed the petition when the State Government refused to make refund. It was held that inasmuch as the assessee during the assessment had not raised the question as to whether the sales in question were exempt under article 286 of the Constitution, the Sales Tax Officer had no occasion to consider the point, and as such, the tax levied by the authority was under a mistake of law, and it was ordinarily the duty of the State, subject to any provision in the law relating to sales tax to refund the tax, and that the assessee's remedy by way of a petition is subject to the same restrictions and also the same period of limitation as in a suit, namely, three years from the date when the mistake became known to the person who has made the payment under a mistake. Reliance for this view was placed on two decisions of the Supreme Court, the cases of Sales Tax Officer v. Kanhaiya Lal[1958] 9 S.T.C. 747 (S.C.). and State of M.P. v. Bhailal Bhai[1964] 15 S.T.C. 450 (S.C.). The Supreme Court, in the circumstances, directed the Sales Tax Officer to return a finding on the question whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is ordinarily the duty of the State subject to any provision in the law relating to sales tax...to refund the tax. If refund is not made, remedy through court is open subject to the same restrictions and also to the period of limitation (see article 96 of the Limitation Act, 1908), namely, three years from the date when the mistake had become known to the person who has made the payment by mistake (see State of Madhya Pradesh v. Bhailal Bhai(2))'. The court further pointed out that it was the duty of the State to investigate the facts when the mistake was brought to its notice and to make a refund if mistake was proved and the claim was made within the period of limitation. In State of Madhya Pradesh v. Bhailal Bhai[1964] 15 S.T.C. 450 (S.C.)., this court held that the High Courts have power for the purpose of enforcement of fundamental rights and statutory rights to give consequential relief by ordering repayment of money realised by the Government without the authority of law'. It was further pointed out in that case that the High Courts had to take into consideration in the exercise of that discretion the delay, if any, made by the aggrieved party in seeking this special reme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitions were not maintainable. Reliance for this proposition was placed on the case of Smt. Ujjam Bai v. State of Uttar PradeshA.I.R. 1962 S.C. 1621. Their Lordships on page 550 of the report, distinguished that case with the following observations: "(12) But we think that that case is clearly distinguishable. Das, J. there stated that 'if a quasi-judicial authority acts without jurisdiction or wrongly assumes jurisdiction by committing an error as to a collateral fact and the resultant action threatens or violates a fundamental right, a question of enforcement of that right arises and a petition under article 32 will lie'. He also said that where a statute is intra vires but the action taken is without jurisdiction, then a petition under article 32 would be competent. That is the case here. There is no doubt that the taxing officer had no jurisdiction to tax inter-State sales, there being a constitutional prohibition against a State taxing them. He could not give himself jurisdiction to do so by deciding a collateral fact wrongly. That is what he seems to have done here. Therefore, we think the decision in Ujjam Bai's case(2) (W.P. No. 79 of 1959) is not applicable to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icle 32 or article 226 of the Constitution. To make this position clear, it was observed on page 1949 as under: "(24) Whilst we are referring to the decision of this court in Ujjam Bai's case[1963] 1 S.C.R. 778., we would hasten to add that we are not dealing with the scope and effect of our powers under article 32 or with the powers of the High Courts under article 226. Our object in referring to the majority decision in Ujjam Bai's case[1963] 1 S.C.R. 778. is merely to show that the tenor of the opinion expressed by the learned judges in the said case is in support of the view that a finding recorded by a taxing authority as to the taxability of any given transaction cannot be said to be a finding on a collateral fact, but is a finding on a fact that the decision of which is entrusted to the jurisdiction of such authority. " And then again on page 1953 of the report, as under: "(39) What then is the ultimate position in this case? The Act under which tax was recovered from the appellant is valid and so is the charging section valid; the appropriate authorities dealt with the matter in regard to the taxability of the impugned transactions in accordance with the provisions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts of that case. It will be noticed that the Indore Industrial Act under which the assessment had been made did not contain any statutory provision for making a refund, and neither was such an order passed by the appellate authority. This being so, the State or its officers were under no statutory liability to make a refund of the tax, and no mandamus against the State or its officers to do something which they were not bound by the statute to do, could be issued. We are of the view that this is the only reasonable way of reading that decision, for to construe it otherwise, would be to bring it in conflict with the other decisions of the Supreme Court which have already been noticed, and in which it has been clearly laid down that a writ can issue, in appropriate cases, directing the State or its officers to fulfil their statutory duty of making a refund. This apart, there is another reason which impels us to hold that the ratio of the case, Suganmal v. State of Madhya Pradesh[1965] 16 S.T.C. 398 (S.C.); A.I.R. 1965 S.C. 1740., cannot be appropriately applied to the facts of the present case. In the present case, there is a prayer for the quashing of the assessment order, as al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ginger" and "garlic" on the ground that they were exempt under a Government Order passed under section 9(1) of the Andhra Pradesh General Sales Tax Act, 1957. The assessee paid the tax and allowed the assessment orders to become final. Some other assessee in whose case a similar point had been decided against them by the Sales Tax Officer filed appeals which were allowed. Thereafter, the petitioner filed petitions under article 226 of the Constitution on the ground that it had been paid under a mutual mistake. It was admitted by the State that the tax had been assessed and collected under a mutual mistake, but the petition was resisted on the grounds analogous to those taken up by the respondents in the present case. The Andhra Pradesh High Court drew a distinction between the cases where refunds were claimed where the assessment order is void, and those in which the assessment order is merely erroneous. It was observed on page 128 of the report as under: "All the decisions which the learned counsel for the petitioner has cited are cases in which the imposition of tax was held to be either beyond the competence of the State Legislature or otherwise opposed to statute. In other w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 66] 17 S.T.C. 473 (S.C.)., a petition was filed for quashing the order of assessment, and also for refund of the tax. The petition was dismissed on the ground that it was filed after a lapse of a number of years and, as such, the assessee was guilty of laches. Now, in the present case, the ratio of the decision of the Supreme Court in the case of Haji Hasan Dada(2) does not appear to be appropriately applicable, inasmuch as the assessment orders have also been questioned in the present petition. This case, however, establishes that the Sales Tax Officer could not have directed a refund of the tax to the petitioner, unless the assessment order on the basis of which the tax had been collected was set aside. The application of the assessee for refund without getting the assessment order set aside was, therefore, wholly misconceived. The prayer for rectification of the assessment order was also untenable, as the assessee had never contested the matter at the time of the assessment, and, as such, it could not be said that there was any error apparent on the face of the record which could be rectified under section 22 of the Act. In this context, it is now necessary to consider whether t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igh Court, as the correctness of the order of the assessing authority in this State has got to be adjudged with reference to the pronouncement of the law by this High Court. Counsel for the petitioner then contends that inasmuch as the assessment orders are void, it was not necessary for the petitioner to challenge them as they were non est, and the cause of action for the present petition arose after the refund applications were rejected. This contention too is not acceptable. We have already seen that the refund applications moved by the assessee could not have been allowed by the Sales Tax Officer without the assessment order having been set aside. This being so, the order passed by the sales tax authorities being a valid order, it cannot, in these circumstances, be said that the laches committed by the petitioner has got to be adjudged with reference to the date of disposal of the refund application. The cause of action for filing the petition really arose after the assessment orders were passed and tax collected by the State, but these events have taken place long time back, and adjudged with reference to this date, the petition is clearly belated. The contention that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... necessary to advert to another question canvassed before us. It has been urged on behalf of the respondents that it is only a bona fide mistake, that is a mistake which could be committed by an ordinary prudent man, that would entitle an assessee to refund of tax. In this context, it is urged that the assessee should be deemed to have knowledge of the decision of this court in the case of Kays Construction Company v. The judge (Appeals) Sales Tax, Allahabad[1962] 13 S.T.C. 302., wherein it was held that construction of passenger bogies for railways was a "works contract", and not liable to tax under the U.P. Sales Tax Act, and that being so, inasmuch as the petitioner paid the tax even after this decision, it could not be said that the tax in question was paid under a mistake of law. Reliance for this view is placed upon a decision of the Calcutta High Court in the case of Anath Bandhu Deb v. Dominion of IndiaA.I.R. 1955 Cal. 626. The Calcutta decision undoubtedly supports this contention. We are, however, unable to agree with this decision in view of the pronouncement of the Supreme Court in the case of Sales Tax Officer, Banaras, and Others v. Kankaiya Lal Makund Lal Saraf [1958 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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