9911796707
TMI Blog1992 (12) TMI 204X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 and 1975-76, the appellant had collected sales tax on the sale of dry cell batteries at 12 per cent. A writ application bearing O.J.C. No. 928 of 1973 was filed in this Court for a direction that dry cell batteries were taxable at 5 per cent, and not at 12 per cent as luxury goods. By judgment dated July 8, 1975, this Court held that the dry cell batteries are taxable at the rate of 5 per cent and not at 12 per cent as luxury goods. The validity of Finance Department Notification No. 23710 dated June 16, 1971, notifying the rate of tax on the sale of dry cell batteries at 12 per cent with effect from July 1, 1971, was the subjectmatter of challenge. Undisputedly, the appellant had collected sales tax on dry cell batteries at 12 per cent a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this Court and Rs. 283 related to collection as contingent deposit. After judgment of this Court, the State Government had moved the apex Court by filing a special leave petition and therefore, contingent deposits were made. The appellant's stand was that provisions of section 9-B(3) of the Act have no application, because when collections were made, Notification No. 23714-CTA-57/71/F dated June 16, 1971, operating from July 1, 1971, was in force. Subsequently, this Court gave its verdict on July 8, 1975 and consequentially question of refund arose. The Sales Tax Officer was of the view that payment was made under a mistake and the Government was duty bound to return the amount of tax, irrespective of the consideration whether money had be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be said that the appellant had realised any amount by way of excess tax. According to him, question of mens rea loses its significance, when no offence is made out. Further submission is that even if it is conceded that mens rea is not the sine qua non for application of section 9-B(3) if no offence is made out, question of resorting to that provision does not arise. Learned counsel for the Revenue on the other hand, contended that the provisions of section 9-B(3) clearly indicate that whenever a registered dealer realises any amount in excess of what is payable by him, they are attracted. The fact that this Court subsequently held that particular rate of tax is applicable makes it operative althrough and therefore, amount collected in exce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant that at the point of time he had collected tax, the same was in reality the amount payable by it. Because of the subsequent nullification of the notification benefit of payment of tax at a lower rate accrued on it and accordingly, refund was granted. Strictly speaking section 9-B(3) has no application to the facts of the case. Collections made prior to judgment of this Court were in accordance with the notification which held the field. The Commissioner was therefore, wrong in holding that the view of the Sales Tax Officer in dropping the proceeding was erroneous. The controversy whether mens rea is to be established in respect of forfeiture, and the applicability of the view expressed by the apex Court in R.S. Joshi's case [1977] 40 ST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s under section 72 of the Contract Act. The said section is based on equitable principles. Therefore, by claiming to retain the tax which has been collected without the authority of law, the Government cannot 'enrich itself and is liable to make restitution to the person who had made payment under mistake or under coercion. While it would be abhorrent to principles of justice to hold that the State which has unjustly enriched itself by collecting tax without authority of law ought to be permitted to retain the money unjustly gained, it would be equally so where a party has collected excess amount under the authority of law at the relevant point of time, but subsequently is not required to pay, and in the process enriches itself. When a part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tention of the enrichment be unjust. This justifies restitution. Enrichment may take the form of direct advantage to the recipient's wealth such as by the receipt of money or indirect one for instance where inevitable expense has been saved. 8.. Another analysis of the obligation is of quasi-contract. It was said "if the defendant be under an obligation from the ties of natural justice, to refund; the law implies a debt, and gives this action founded in the equity of the plaintiff's case, as it were, upon a contract (quasi ex contractu) as the Roman law expresses it." As Lord Wright in Fibrosa Spolka v. Fairbairn Lawson Combe Barbour Ltd. [1943] AC 32 (HL); [1942] 2 All ER 122 (HL), pointed out, "the obligation is as efficacious as if it w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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