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TMI Blog2016 (4) TMI 134X X X X Extracts X X X X X X X X Extracts X X X X ..... the operation of Section 4A of the Act, 1976, but directing the petitioner to file returns. So far as the payment of tax contemplated under Section 5(3) of the Act, 1976 is concerned, the petitioner was directed to furnish bank guarantee to the satisfaction of the assessing authority on or before 15th of every month in relation to the tax payable for the preceding month. Thereafter, by judgment dated 4.8.1977, the writ petition was allowed following the judgment in O.P.No.5478 of 1994. By the said judgment, Section 4A of the Act, 1976 and the schedule thereto as amended by the Finance Bill, 1994 were declared unconstitutional, invalid and inoperative and the said provisions were set aside. 2. It was urged in the writ petition that the appellant had been furnishing returns as provided in the interim order till the provision was declared unconstitutional. However, in the matter of furnishing of bank guarantee, it is submitted that by Exhibits P1 to P5, the commercial tax authorities had requested the appellant to make payment of at least a portion of the total luxury tax in cash in lieu of the bank guarantee already furnished. It was specifically held out that "if the case is decide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 142 of the Constitution of India to strike down the offending provision only with prospective effect and therefore, there was no question of applying that principle to the instant case. It was pointed out that in view of the interim orders rendered in O.P. 2190 of 1955, the appellant need have only furnished a bank guarantee and that amounts had been paid only on the assurance of refund by the respondents. This was again rejected by Exhibit P15 order dated 21.1.2008, which prompted the filing of the writ petition. 4. The Revenue had filed a detailed counter affidavit admitting that an amount of Rs. 11,24,92,135/- had been paid by the appellant towards luxury tax during the period from 1995 to 2001. However, it is stated that the Honourable Supreme Court in Godfrey's case (supra) had, relying on an earlier decision in Somaiya Organics' case (supra), held that while striking down the impugned Acts, it is not appropriate to allow any refund of tax already paid under the impugned Acts. It was further held that bank guarantees, if any, furnished by the assessee will stand discharged. It is further stated that while striking down the impugned Acts, the Apex Court did not think ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t on their part which is not supported by any due process of law. It is also urged by the learned counsel that the appellant had furnished all available materials before the respondents to prove that they had made no collection of luxury tax from their customers and that the amount paid by them in lieu of the bank guarantee was made out of their own fault and therefore the appellant is eligible for refund. 7. Per contra, it is contended by the learned Special Government Pleader for Commercial Tax that the decisions in Somaiya Organics' case (supra) and Godfrey's case (supra) would specifically go to show that the appellant was not entitled to refund of tax already paid by them even in case the levy was later found to be bad in law. The amounts paid as tax till the date of the invalidation of the changing provision in the Act was not liable to be refunded is the principle laid down in the above decisions, according to him. It is further contended that no reliable material was produced by the appellant before the authorities to prove that the appellant had not collected luxury tax from their customers. The appellant who was the dealer under the Act was statutorily enjoined t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lect or realise vend fee after 25-10-1989 it cannot be allowed to invoke the bank guarantee and realise the amount of vend fee. What cannot be done directly cannot be done indirectly either. Furnishing of bank guarantee is only a promise by the bank to pay to the beneficiary the amount under certain circumstances contained in the bank guarantee. Furnishing of bank guarantee cannot tantamount to making of payment as it was to avoid making payment of the vend fee that bank guarantees were issued. The respondents, in other words, are not entitled to encash the bank guarantees and realise vend fee in respect of the period prior to 25-10-1989. xx xx xx 39. Lastly, while relying on Mafatlal Industries Ltd. v. Union of India Shri Dwivedi submitted that the appellants had realised the amount of vend fee payable by taking that figure into account while determining their sale price and, therefore, the State is entitled to recover the same as it would otherwise result in unjust enrichment to the appellants. 40. In Mafatlal case the principle of unjust enrichment was invoked as refund was claimed even though the amount of excise duty paid had already been recovered. This principle result ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a [(2015 (315) E.L.T 488 (Ker.)]. 11. In any view of the matter, the appellant contends that since the appellant was only enabled by the provisions to collect tax from the customers, there was no mandate to do so and the appellant had, as a matter of fact, not collected such tax. In support of this contention, the appellant places reliance on the decision of the Apex Court in Kanthi Enterprises and others v. State of Karnataka and others [(2002)7 SCC 283]. 12. What arises from a consideration of the facts in this case is that the appellant had been enjoined by an interim order of this Court only to furnish bank guarantee for amounts payable as luxury tax. The appellant was requested to pay the tax in cash in lieu of the bank guarantee on the specific understanding that such amounts would be refunded, if the appellant was successful in the litigation. This was specifically held out in the communications produced as Exhibits P1 to P5 by the appellant. Had the appellant furnished bank guarantee as directed by this Court, going by the ratio of the decision in Somaiya Organics's case (supra), that bank guarantee could not have been enforced against the appellant and the same would ..... X X X X Extracts X X X X X X X X Extracts X X X X
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