TMI Blog1987 (12) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... nd notice of demand under the Assam Taxation (on Goods Carried by Roads or Inland Waterways) Act, hereinafter called the Act, but declining to order any refund of the taxes paid. In 1954, the Assam Taxation (on Goods Carried by Roads or Inland Waterways) Act was first enacted. This court struck down the Act as ultra vires the Constitution of India (see Atiabari Tea Co. Ltd. v. State of Assam, AIR 1961 SC 2321. On April 6, 1961, a new Act was passed which received the assent of the President. The High Court again struck down the Act declaring it ultra vires the Constitution on August 1, 1963. On December 13, 1963, in Khyerbari Tea Co. Ltd. v. State of Assam [1964] 5 SCR 975, in a challenge to the Act under article 32 of the Constitution, this court held the Act to be intra vires. On December 19, 1966, judgment was passed in Civil Rule No. 190 of 1965. On April 1, 1968, the appeals preferred by the State of Assam against the High Court order dated December 13, 1963, were allowed on the basis of the declaration of the Act to be intra vires the Constitution. Thereafter, notices were issued by the Superintendent of Taxes, Nowgong, requiring the appellant under section 7(2) of the Act to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of the High Court were allowed by this court on April 1, 1968. It was after this decision that the respondents required the appellant by a notice under section 7(2) of the Act issued on July 8, 1968, to submit returns for the four periods mentioned hereinbefore. Due to penal consequences mentioned in the said notices in the event of failure to file returns and pay the taxes, the appellant filed the returns on July 11, 1968, and paid the various taxes. In the judgment under appeal, after elaborate discussion, the High Court came to the conclusion that when a petitioner approaches the High Court with the sole claim for refund of money by a writ of mandamus, the same is normally not granted but where the refund is prayed as a consequential relief, the same is normally entertained if there is no obstruction or if there be no triable issue like that of limitation which could not be conveniently tried in a writ petition. In this case, indisputably, it appears that tax was collected without the authority of law. Indeed, the appellant had to pay the tax in view of the notices which were without jurisdiction. It appears that the assessment was made under section 9(3) of the Act. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y collected the money as tax and in such a suit it was open to the State to raise all possible defences to the claim, defences which cannot, in most cases, be appropriately raised and considered in the exercise of writ jurisdiction. It appears that section 23 of the Act deals with refund. In the facts of this case, the case did not come within section 23 of the Act. But in the instant appeal, it is clear as the High Court found, in our opinion rightly, that the claim for refund was consequential relief. In Tilokchand Molichand v. H. B. Munshi, Commissioner of Sales Tax [1970] 25 STC 289 (SC); [1969] 2 SCR 824, the claimants in that case contended that they did pay taxes under section 21(4) of the Bombay Sales Tax Act, 1953, which was ultra vires on the particular ground on which it was struck down by this court. On March 28, 1958, the petitioners in that case filed a writ petition in the High Court and contended that section 21(4) of the said Act was ultra vires the powers of the State Legislature and was violative of articles 19(1)(f) and 265 of the Constitution. The single judge of the High Court dismissed the petition on the ground that the petitioners defrauded their custome ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid in such a case, the court would not allow fresh proceedings to be started under article 32 but would insist on the decision of the High Court being brought before it on appeal. Similarly, in inquiring into belated or stale claims, this court should take note of evidence of neglect of the petitioner's own rights for a long time or of the rights of innocent parties which might have emerged by reason of the delay. The Chief justice emphasised that it was not possible for this court to lay down any specific period as the ultimate limit of action and each case will have to be considered on its own facts. A petition under article 32 was neither a suit nor an application to which the Limitation Act applied. Further, putting curbs in the way of enforcement of fundamental rights through such legislative action might be questioned under article 13(2) for, if a short period of limitation was prescribed, the fundamental right might be frustrated. Therefore, for the matter of relief in each case, this court had to exercise its discretion from case to case and where there was appearance of an avoidable delay and the delay affected the merits of the claim, this court held the party disent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o delay. He observed that mere impression of a party that a provision of law might be ultra vires cannot be equated to the knowledge that the provision was invalid. Under article 113 of the Limitation Act, 1963, the limitation was period of three years from the date the right to sue accrues. It may be noted that in the instant case, under section 23 of the Act, it was provided that the Commissioner shall, in the prescribed manner, refund to a producer or a dealer any sum paid or realised in excess of the sum due from him under this Act either by cash or, at the option of the producer or dealer, be set off against the sum due from him in respect of any other period. Section 23 applies only in a case where money is paid under the Act. If there is no provision for realisation of the money under the Act, the act of payment was ultra vires, the money had not been paid under the Act. In that view of the matter, section 23 would not apply. The High Court, in the instant case, after analysing the various decisions came to the conclusion that where a petitioner approached the High Court with the sole prayer of claiming refund of money by a writ of mandamus, the same was normally not g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [1967] 2 SCR 286, was a case where this court observed that the High Court erred in exalting a rule of practice into a rule of limitation and rejecting the petition of the appellant for refund without considering whether the appellant was guilty of laches or undue delay. Shah J., delivering the judgment of the court, observed that the primary question in each case is whether the applicant had been guilty of laches or undue delay. Reference may be made in this connection to R. L. Kapur v.; State of Tamil Nadu [1972] 3 SCR 417. There, the question arose about punishing for contempt. The jurisdiction conferred on the High Court under article 215 of the Constitution to punish for contempt of itself was special one, not arising or derived from the Contempt of Courts Act, 1952, and, therefore, not within the purview of the Penal Code. Such position is also clear from the provisions of the Contempt of Courts Act. The effect of section 5 of that Act was only to widen the scope of the existing jurisdiction of a special kind and not conferring a new jurisdiction. So far as contempt of the High Court itself is concerned, as distinguished from that of a court subordinate to it, the Constit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under a mistake of law and the tax so paid was refundable under section 72 of the Indian Contract Act, 1872. The appellant contended that there was no violation of article 301 of the Constitution, and even if there was such violation, the tax came within the special provision under article 304(a) of the Constitution and the High Court had no power to direct refund of tax already paid and in any event the High Court should not exercise its discretionary power of issuing a writ of mandamus directing this to be done since there was unreasonable delay in filing the petition. The High Court rejected all the contentions of the appellant and a writ of mandamus was issued as prayed for. It was held that the tax was violative of article 301 of the Constitution. But it was held that even though the tax contravened article 301 of the Constitution, it was valid if it came within the saving provisions of article 304 of the Constitution. Tobacco manufactured or produced in the appellant-State, similar to the tobacco imported from outside, had not been subjected to the tax and, therefore, the tax was not within the saving provisions of article 304(a) of the Constitution. It was reiterated that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raj Wadhwani [1962] 1 SCR 753, this court held that the High Court was in error in its view that though the respondent had failed to exercise his statutory remedy, the fact that it had become time-barred at the date of the hearing of the appeal against the order in the petition under article 226, was a good ground for the court to exercise its discretion in granting the relief prayed for by the respondent in his petition. Learned counsel drew our attention to rule 55 of the Act where it was stated that no claim to any refund shall be allowed unless it was made within one year from the date of the original order of assessment or within one year of the final order passed on appeal or revision, as the case may be, in respect of such assessment. It was contended on behalf of the respondents that here a fixed period of limitation was prescribed and by virtue of article 226 of the Constitution, we should not allow subversion of that rule. This principle, in our opinion, in view of the fact that the rule was unconstitutional, will have no application. In Shiv Shanker Dal Mills v. State of Haryana [1980] 1 SCR 1170, Krishna Iyer J., speaking on behalf of himself as well as on behalf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tionary and the High Court, in the exercise of its discretion, did not ordinarily assist the tardy and the indolent or the acquiescent and the lethargic. If there was inordinate delay on the part of the petitioner in filing a writ petition and such delay was not satisfactorily explained, the High Court might decline to intervene and grant relief in the exercise of its writ jurisdiction. The evolution of this rule of laches or delay was premised upon a number of factors. The High Court did not ordinarily permit a belated resort to the extraordinary remedy under the writ jurisdiction because it was likely to cause confusion and public inconvenience and bring in its train new injustices. It was emphasised that this rule of laches or delay is not a rigid rule which can be cast in a strait jacket formula. There may be cases where despite delay and creation of third party rights, the High Court may still, in the exercise of its discretion, interfere and grant relief to the petitioner. But cases where the demand of justice is so compelling that the High Court would be inclined to interfere in spite of delay or creation of third party rights would, by their very nature, be few and far betw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... without the authority of law from the appellants. The appellant's contention is that they had paid the taxes under a mistake of law and are entitled to seek refund thereof. It is difficult to see how the High Court could have allowed the appellant's prayer for quashing the assessments but refused the prayer for the refund of the illegally collected taxes. The appeals have, therefore, to be allowed. Counsel for the respondents, however, places strong reliance on the following observations of a Constitution Bench of this court in State of Madhya Pradesh v. Bhailal Bhai [1964] 15 STC 450; [1964] 6 SCR 261 : Though the provisions of the Limitation Act do not, as such, apply to the granting of relief under article 226, the maximum period fixed by the Legislature as the time within which the relief by a suit in a civil court must be claimed may ordinarily be taken to be a reasonable standard by which delay in seeking remedy under article 226 could be measured ......... Where the delay is more than that period, it will almost always be proper for the court to hold that it is unreasonable. He also relies on Cawasji and Co. v. State of Mysore [1975] 2 SCR 511 and draws ..... X X X X Extracts X X X X X X X X Extracts X X X X
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