TMI Blog1987 (7) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... pality from the plaintiff towards octroi. Special Civil Application No. 1729 of 1977 has been moved by the plaintiff directly in this court against the State of Gujarat and the defendant-municipality challenging the vires of the Gujarat Act No. 6 of 1978, viz., Dhrangadhra Municipality (imposition of Tax) Validation Act, 1977. For the sake of convenience, we shall refer to Dhrangadhra Municipality as the defendant and Dhrangadhra Chemical Works as the plaintiff in the latter part of this judgment. The plaintiff alleged in its aforesaid suit that the defendant had no authority to levy or recover octroi from the plaintiff and that the action of the defendant in recovering and retaining octroi from the plaintiff was illegal and ultra vires. The plaintiff's case was that it is a company registered under the Indian Companies Act and is carrying on the business of manufacturing soda ash and other chemicals. For that purpose, it is having its factory within the municipal limits of the defendant municipality at Dhrangadhra town in Surendranagar district. The Bombay District Municipal Act, 1901, was applied to the merged territories of Saurashtra from July 1, 1949, and the defendant munic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against the defendant on the aforesaid grounds. When this appeal and the companion special civil application reached final hearing before us, Mr. Raval, for the defendant, vehemently contended that the suit, as filed by the plaintiff, does not disclose any cause of action and suffers from a fatal flaw and only on this short ground, the suit is liable to be dismissed and the decree passed against the defendant is liable to be set aside. According to Mr. Raval, the suit, as filed by the plaintiff, is based on the ground that the defendant had no authority to collect octroi dues from the plaintiff and various amounts realised by the defendant towards octroi were allegedly illegally realised and retained and these dues are liable to be refunded to the plaintiff. This suit, therefore, submitted Mr. Raval, squarely falls, if at all, within the four corners of section 72 of the Indian Contract Act. That the basic ingredients for succeeding in the suit under section 72 of the said Act have to be pleaded and proved by the plaintiff and in the facts of the present case, neither is there such pleading nor is there any proof offered by the plaintiff to entitle it to succeed under section 72 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entitled to recover octroi, such appropriation was bad in law and, therefore, the deposited amount was required to be refunded to the depositor, viz., the plaintiff. It was ultimately contended that the decisions of the three Division Benches of this court in the cases of Bharat Vijay Mills Co. [1984] 25(2) GLR 1111, New India Industries Ltd. [1983] 24(2) GLR 1108 and Tata Chemicals Ltd. [1983] (3) GLH 985 were required to be reconsidered in view of the fact that they were contrary to the decisions of the other High Courts to which our attention was invited and to which we will make a detailed reference hereafter. Reliance was also placed on two decisions of the Supreme Court in the cases of CST v. Auraiya Chamber of Commerce [1987] 167 ITR 458 and State of Kerala v. Aluminium Industries Ltd. [ 1965] 16 STC 689. It was submitted that the Division Bench judgments of this court require reconsideration at least in the light of the aforesaid Supreme Court decisions. We shall now proceed to deal with the aforesaid controversy posed for our consideration in the present proceedings and the efficacy of the rival versions centering round this controversy. So far as the submission of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 4 of the Ordinance and framed rules for collection of octroi under the said Ordinance. In para 5 of the plaint, it has been averred that under the provisions of the Bombay District Municipal Act, 1901, the Government has no authority and the defendant municipality cannot derive such authority directly from the Government for levying and collecting octroi, as from the date of the said Municipal Act. Then follows para 6 which recites that from July 1, 1963, the rate of octroi on different goods which was raised by the defendant to 1 1/2 times was also without following the prescribed procedure and without complying with the necessary preliminaries under Chapter VII of the Bombay District Municipal Act, 1901. In para 7, it has been averred that the defendant had no right to amend the schedule of rates and if the schedule of rates was purported to have been revised under Ordinance No. 47 of 1949, it could be done only by the Government and not by the municipality. Having made these relevant averments which naturally impinged upon the power and authority of the defendant-municipality to collect octroi dues from the plaintiff, para 8 of the plaint is introduced and on which strong ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted in extenso as under: "The plaintiff, therefore, prays: (a) It be declared that the defendant has no authority to levy or recover octroi from the plaintiff and that the action of the defendant in levying and collecting octroi is illegal, void and ultra vires and a decree be made against the defendant for Rs. 6,29,066.97 (rupees six lakhs twenty-nine thousand sixty-six and paise ninety-seven) being the amount of octroi illegally collected by them from the plaintiff up to the period ending with September 31, 1961. (b) the recovery of the cost of the suit from the defendant. (c) tiny other relief that the honourable court deems fit to be granted." On a combined reading of these relevant paras in the plaint, no doubt is left in our mind that this suit is essentially a suit for refund of various octroi dues recovered by the defendant from the plaintiff and which, according to the plaintiff, have been illegally recovered and/or retained by the defendant-municipality. If any doubt was left, it is set at rest by the express wording of the prayer clause which seeks a declaration that the action of the defendant in levying and collecting octroi is illegal, void and ultra vires ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... express pleadings contained in various paras of the plaint to which we have made reference, it must be stated that nowhere, by a remotest implication, a case of return of bailed goods from the defendant is pleaded by the plaintiff. It is not the case of the plaintiff that it had bailed various amounts with the defendant, even assuming that cash amount can be made the subject-matter of bailment and that it was done for a specific purpose which is now over and, that therefore, the bailor demands back the bailed goods from the bailee. On the express language of the plaint and especially in the light of the prayer clause, such case is totally ruled out. Reliance placed by the learned advocate for the plaintiff on the decision of the Supreme Court in the case of Shanti Prasad Jain v. Director of Enforcement, AIR 1962 SC 1764, is also of no avail to the plaintiff. In that case, the question before the Constitutional Bench of the Supreme Court was whether the appellant, Shanti Prasad, before the Supreme Court, could be said to have contravened the provisions of section 23(1)(a) read with section 23D of the Foreign Exchange Regulation Act, 1947, on the ground that he had received some amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re amount on the ground that the defendant had no authority to appropriate this amount as octroi dues. The suit was filed on April 9, 1963. By that 'lime, admittedly, as stated in the plaint, the entire amount collected over the years were got appropriated towards octroi dues and was credited in the books of account of the defendant as octroi recovered from the plaintiff. It is that amount which is sought to be recovered from the defendant on the ground that the defendant had no power to levy octroi during the relevant time. Consequently, the suit, as filed, must necessarily be held to be one for refund of octroi amount collected and retained by the defendant from the plaintiff which, according to the plaintiff, the defendant had no right to recover and collect as octroi. In that view of the matter, the decision of the Supreme Court in Shantz' Prasad's case, AIR 1962 SC 1764, cannot be of any avail to the plaintiff. It was next contended that in any case, the suit may fall under section 70 of the Contract Act. This contention also cannot be of any assistance to the learned advocate for the plaintiff for the simple reason that all that section 70 enjoins is that where a person law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iod of time. If this is so, section 72 of the Contract Act is the only legal foundation on which the suit can be rested, if at all. Section 72 reads as under : "72. A person to whom money has been paid, or anything delivered, by mistake or under coercion, must repay or return it." A mere reading of this section shows that before the plaintiff can hope to succeed in such a suit, it must be pleaded and then, if necessary, proved that the money has been paid by the plaintiff to the defendant under a mistake or under coercion. Unless this pleading is put forward, the basic requirement of section 72 would not be satisfied. It is nowhere pleaded in the plaint that either under a mistake or under coercion, the plaintiff had paid various amounts to the defendant on account towards octroi dues claimed by the defendant from the plaintiff for the relevant period. Learned advocate for the plaintiff also did not make any effort to submit that any such case was pleaded, much less proved, but as we have indicated above, his effort was to walk out of section 72 and to bring the suit within the sweep of section 70 or section 148 of the Contract Act. Once that effort is demonstrated to be aborti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pso facto based on the principle of restitution. So far as the principle of restitution is concerned, the principle of unjust enrichment of the defendant at the cost of the plaintiff entitling the plaintiff to get restitution through the court process is highlighted at page 649 of the above book, wherein the following observations are worth noting : "The principle of unjust enrichment presupposes three things : first, that the defendant has been enriched by the receipt of a benefit ; secondly, that such enrichment has occurred at the expense of the plaintiff ; thirdly, that it would be unjust for the defendant to retain that benefit. There is no accepted classification of situations where a claim to restitution will arise on the ground of unjust enrichment." It becomes, therefore, obvious that for basing the claim against the defendant on the bed-rock of quasi- contract, it has to be shown, of necessity, that the defendant has got enriched by receipt of the benefit from the plaintiff which it would be unjust to allow him to retain and that such enrichment must have occurred at the expense of the plaintiff. It has, therefore, to be shown that the plaintiff has a better right to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... collection instrumentality. If, ultimately, it is found that tax is illegally recovered by the defendant, then it should go back to the real taxpayer and the real taxpayer is not the plaintiff but the consumer who has borne the burden of the tax. It must logically follow that no collecting instrumentality can claim any refund of money because such intermediary is not out of pocket in any manner. The entire burden of tax rests on the shoulders of the real taxpayer, viz., the consumer. Under these circumstances, when the tax is passed on to the consumer, no case for any restitution to the intermediary would ever survive. Such intermediary suing as plaintiff can-never be permitted to get restitution from the defendants as, for them, it would be windfall and an unjust enrichment at the cost of the proper claimants for restitution, namely, the consumer-real taxpayer. In such cases, the real plaintiffs should be those who have actually suffered the burden of tax. They would be the persons to whom restitution has to be made, if at all, and they would be the persons who would suffer legal injury if the restitution is denied and not the intermediaries like the traders and manufacturers who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... njoins the court to reject the plaint which does not disclose any cause of action. In the light of the averments found in the plaint, therefore, it must be held that it does not disclose any completed cause of action under section 72 of the Act and, therefore, such plaint was liable to be rejected even at the threshold. Merely because the trial had gone on and a decree came to be passed, though partially in favour of the plaintiff, it would not improve the situation for the plaintiff as the plaint which was inherently defective from its inception, being a still-born one, has got to be rejected whenever it is brought to the court's notice at any stage of the proceedings that it was vitally defective at the time it was presented in court. In this connection, we may also profitably refer to decision of the Supreme Court in Union of India v. Sita Ram, AIR 1977 SC 329. In that case, the Supreme Court was concerned with the nature of pleadings in a suit under section 70 of the Contract Act which also deals with a type of quasi-contract. The Supreme Court considered as to what were the legal requirements of such a suit and what was required to be pleaded and proved and what would be the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsumes the commodity that bears the burden of tax. The commodity carries the burden of tax with it. The person who collects the amount of tax and pays it to the Government, or to the appropriate authority, happens to be at the particular stage where it is administratively convenient to collect the amount of tax and pass it on to the Government. In the case of excise duty, the factory gate is ordinarily a convenient stage where the amount of excise duty is levied. But it may be that in a given case, excise duty may be levied even from the consumer of the commodity. Coal Production Fund Ordinance, 1944, provided for levy of excise duty from the consignee and not from the consignor or from the owner of the collieries. Even so, the Supreme Court in the case of R. C. Jall v. Union of India, AIR 1962 SC 1281, held that duty was that of excise and no other tax. In the case of customs duty, at the time when the commodity enters into or goes out from the boundaries of the country, the duty is levied. Similarly, octroi duty is levied when the commodity enters into the octroi limits of the local authority concerned. In the case of sales tax, the tax is to be levied when the event of sale tak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Constitution of India indicates the basic ideal and objective of the Constitution of India, which is to establish an egalitarian society based on socialistic principles. Similarly, the fundamental principles in the governance of the country require the State (the term "State" occurring in article 12 of the Constitution of India also includes judiciary) to direct its policy towards securing the ownership and control of the material resources of the community to be distributed so as to subserve the common good in the best manner (article 39B). Article 39A of the Constitution of India enjoins upon the State to secure that the operation of the legal system promotes justice on the basis of equal opportunity. It also enjoins a duty upon the State to see that no citizen, by reason of economic or other disabilities, is denied justice. After realising that in the case of commodity taxes, ultimately, the innumerable unidentifiable consumers bear the burden of tax and that they are the real sufferers, if the court passes an order of refund of the amount of such tax in favour of someone who does not suffer the burden of the tax, the court would be acting against the basic ideal or object ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount of Rs. 1,02,46,701.52 on the ground that this amount representing excise duty was illegally collected from the plaintiff company was entitled to maintain such a suit. It becomes obvious that this was also a suit under section 72 of the Indian Contract Act. Whether the plaintiff company which had by itself not borne the burden of tax but which had collected the tax from the consumers could maintain such a suit and claim any decree from the Department on the basis of the alleged recovery of excise tax, the following observations were made by Bedarkar J., speaking for the Division Bench, in para 18 of the report. "Now a word or two about the claim made by the plaintiff company in the suit. It is an admitted position that the plaintiff company has passed on the incidence of the tax to the consumer (see para 19 of the deposition of Harjivandas, exhibit 43 P.W.D. The company claims refund of this amount of excise duty which is more than a crore of rupees on the ground that it paid the amount of excise duty in question under a mistake of law. According to the plaintiff-company, the mistake was discovered after the judgment of this court in the case of Alembic Glass Industries some ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on as to whether the framers of the Constitution would have ever conceived even in their wildest possible imagination that in free India, through the justice delivery system, it should be possible for the fortunate few (i.e., manufacturers) to commit a mistake, and for that mistake, hard pressed middle class citizens and underprivileged, half-clad starving poor millions of the country should be made to suffer. Since that question does not arise in this case, we do not propose to deal with the same in detail." In the light of the aforesaid observations in that case, the Division Bench took the view that the appeal filed by the defendant, Union of India, representing the Excise Department was required to be allowed and the judgment and decree of the trial court granting restitution of various amounts to the plaintiff, Tata Chemicals, were required to be set aside. It is true that in that case, it has been found that it was an admitted position on the record of the case that the burden of tax was passed on to the consumers. But, in the present case, the situation is much worse for the plaintiff. In this case, the plaintiff never whispers even in the plaint that it had borne the burd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plaintiff used to send from time to time to the defendant various amounts by cheques towards the octroi claim of the defendant. Merely because they were kept in a separate account, it cannot be said that payments were not made towards the octroi claim of the defendant. It is also interesting to note that neither before the trial court nor before this court, even a faint suggestion was made that the entire burden of tax amount paid by the plaintiff to the defendant towards alleged claim of octroi dues of the defendant over the years was not passed on by the plaintiff, which is a manufacturer, to its customers and that the entire burden was suffered by the plaintiff alone. When such a-case is not pleaded nor proved and when the plaintiff has not ventured to open its mouth even to remotely suggest such a possibility, it must be held that this is a case in which the plaintiff cannot dare suggest that it has not passed on the burden of octroi duty to the customers and that over the years it had suffered the burden by itself. Consequently, it must be held that in the present case, the plaintiff has not suffered any incidence of tax meaning thereby, it had passed it on the whole hog to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd in Chapter V of the Contract Act and observed as under (at p. 1129) : "In cases failing under this Chapter, the basis of the obligation which may arise is not founded upon any contract or tort but upon a third category of law, namely, quasi-contract or restitution." The English law on the subject was then discussed and having quoted observations in two such decisions, it was observed (at p. 1130) : "From this, it should be clear that the underlying object of section 72 is that a person cannot retain the money of, or some benefit derived from, another which legitimately does not belong to him and which it would be unconscionable to allow him to retain the same. Therefore, the basic idea is that there should be restitution of the money or the benefit, derived oil account of mistake or coercion and the person who has been deprived of the money or benefit should be restored the same, and that there should not be unjust enrichment." Thereafter, in para 36, it has been observed as under (at p. 1130) "It is trite knowledge that the substantial portion of the public revenue is recovered through indirect taxes. The amount collected by the Central and State Governments and even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t founded upon any contract or tort but upon a third category of law, namely, quasi-contract or restitution. The object with which section 72 is enacted is on the one hand to prevent unjust enrichment of persons to whom money is paid or thing delivered by mistake or under coercion and on the other to restore money or a thing to its real or proper owner. In other words, the object of section 72 is restoration of money or thing to the real or proper owner or reparation of injury or making good any loss which might have been occasioned to the person making payment or delivering thing on account of money or delivery of thing by mistake or under coercion. No one can be allowed to enrich himself unjustly at the cost or the expense of another. And it is with this object in view that section 72 is enacted. The Division Bench then considered what would be the basic requirements of pleadings for supporting the case under section 72 of the Act and made the following pertinent observations in this connection in para 18 of the report (at p. 1127) "It was urged on behalf of some of the mills that sometimes the manufacturer has to sell his goods at a price which may be less than the cost. In su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had purchased the articles manufactured by the plaintiff. It is obvious that as a prudent businessman, the plaintiff which is a manufacturing concern would, while fixing the price of its commodity, take into account the octroi duty paid on the raw material imported by it within the municipal limit which would go into the making of the finished manufactured product. It also cannot be disputed and it was rightly not disputed that the octroi duty paid on the raw material from which finished products are manufactured entered the cost structure of the plaintiff's finished products and that the same was shifted on to the purchasers of the plaintiff's products. It is easy to visualise that, in normal circumstances, this duty amount would naturally be passed on to the consumers by way of fixing of price charged from them. If there is any exception to this normal situation, then it has to be expressly pleaded and then proved by the plaintiff who will be having special knowledge about it. The burden to prove this fact will be on the plaintiff under section 106 of the Evidence Act. The plaintiff made no effort in that direction. Therefore, it must take the consequence of such a stand on its p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... necessary implication, supports the ratio of the three Division Bench judgments of this court, puts beyond any pale of controversy, the question posed for our consideration in the present proceedings. We must, therefore, hold that in the present case, the suit, as. filed by the plaintiff, did not disclose any cause of action and was liable to be rejected and dismissed as the basic requirements of section 72 are neither pleaded nor proved by the plaintiff. As the Supreme Court decision in State of Madhya Pradesh, AIR 1985 SC 901, has taken the same view which was taken by the three Division Bench decisions of this court, there remains no occasion for us to consider the request of the learned advocate for the plaintiff to refer this question to a larger Bench of this court. Even otherwise, we respectfully concur with the ratio of the decisions of the three Division Benches of this court and we do not entertain any doubt about the correctness of these decisions. However, a valiant effort was made by the learned advocate for the plaintiff to salvage the situation by submitting that various other High Courts have taken a contrary view and that even the Supreme Court, in some decisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le facts ; (ii) statements of the principles of law applicable to the legal problems disclosed by the facts ; and (iii) judgment based on the combined effect of (i) and (ii) above. For the purposes of the parties themselves and their privies, ingredient No. (iii) is the material element in the decision, for it determines finally their rights and liabilities in relation to the subject matter of the action. It is the judgment that estops the parties from reopening the dispute. However, for the purposes of the doctrine of precedents, ingredient No. (ii) is the vital element in the decision. This, indeed, is the ratio decidendi. It is not everything said by a judge when giving judgment that constitutes a precedent. The only thing in a judge's decision binding party is the principle upon which the case is decided, and for this reason it is important to analyse a decision and isolate from it the ratio decidendi." The aforesaid observations have been adopted by a Full Bench of this court in the case of Ahmedabad Mfg. and Calico Printing Co. Ltd. v. Union of India [1983] 24(1) GLR 1. After referring to the aforesaid decision of the Supreme Court and two other decisions of the Supre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Supreme Court has laid down the principle of law that the term "mistake" occurring in section 72 of the Indian Contract Act takes within its sweep "mistake" of facts as well as "mistake" of law. To read anything more in this decision would be doing something which is not permitted by the Supreme Court itself. This conclusion of ours becomes apparent when we have a close look at the judgment of the Constitution Bench of the Supreme Court in Sales Tax Officer v. Kanhaiyalal, AIR 1959 SC 135. The limited question before the Supreme Court in that case was as to whether the suit for refund of sales tax allegedly illegally collected from the plaintiff by the defendant was maintainable. Analysing section 72 of the Contract Act, N. H. Bhagwati J. (as he then was), speaking for the Supreme Court, made the following observations : "Where it is once established that the payment, even though it be of a tax, has been made by the party labouring under a mistake of law, the party is entitled to recover the same and the party receiving the same is bound to repay or return it. No distinction can be made in respect of a tax liability and any other liability on a plain reading of the terms of secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Constitution Bench decision of the Supreme Court. It is interesting to note that on the point with which we are concerned, there is a direct decision of the Supreme Court in the case of State of Madhya Pradesh v. Vyankatlal, AIR 1985 SC 901 ; [ 1987 ] 64 STC 6, where, it has been held that unless the plaintiff shows that non-granting of refund of duty would amount to unjust enrichment to the defendant, the suit cannot be decreed. That decision has also considered the Constitution Bench decision of the Supreme Court in Sales Tax Officer v. Kanhaiya Lal, AIR 1959 SC 135. In that view of the matter, it would not be open to the plaintiff to contend before us that Kanhaiya Lal's case takes a view which is in favour of the plaintiff on the facts of this case. Our attention was then invited to the decision of a two-member Bench of the Supreme Court in the case of D. Cawasji and Co. v. State of Mysore, AIR 1975 SC 813. In that case, a writ petition was moved in the High Court of Mysore under article 226 by D. Cawasji Co. for a declaration that the Mysore Elementary Education Act, 1941, and the amendments to it by the Mysore Elementary Education (Amendment) Act (XII of 1955) providing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce was placed by the learned advocate for the plaintiff. We, therefore, deem it fit to extract the entire paras 9 and 10 of the report (at p. 815) : "9. We are aware that the result of this view would be to enable person to recover the amount paid as tax even after several years of the date of payment, if some other party would successfully challenge the validity of the law under which the payment was made and if only a suit or writ petition is filed for refund by the person within three years from the date of declaration of the invalidity of the law. That might both be inexpedient and unjust so far as the State is concerned. 10. A tax is intended for immediate expenditure for the common good and it would be unjust to require its repayment after it has been in whole or in part expended, which would often be the case, if the suit or application could be brought at any time within three years of a court declaring the law under which it was paid to be invalid, be it a hundred years after the date of payment. Nor is there any provision under which the court could deny refund of tax even if the person who paid it has collected it from his customers and has no subsisting liability o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was with regard to the period of limitation within which the petition under article 226 of the Constitution of India should have been filed. After referring to the provisions of section 17(1)(c) of the Limitation Act, 1963, the Supreme Court has observed in para 8 of the judgment to the effect that a writ petition for refund of the tax within the period of limitation prescribed, that is, three years from the date of the knowledge of the mistake would also lie. The Supreme Court also observed that if any writ petition is filed beyond a period of three years, it would always be proper for the court to consider that it is unreasonable to entertain that petition, though, even in cases where it is filed within three years, the court has a discretion having regard to the facts and circumstances of each case, not to entertain the petition. Thereafter, what is observed in paragraphs 9, 10, 11 and 12 of the judgment was with a view to focussing the attention of the Legislature to the present defective state of law in the country. What is stated and observed in these paragraphs does not pertain to the actual controversy before the court and the same cannot be said to be the principles of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, such sum should be refunded. This is recognised in the provisions of the Act as we have noted before. The principle of section 72 of the Indian Contract Act has been recognised." It is obvious that the liability of the authorities who might have collected tax under a mistake of law to refund the same has been found to be flowing from section 72, but the further question whether the dealer who was claiming such refund under section 72 can maintain his claim without pleading and proving further ingredients of section 72, viz., that he had suffered legal injury and prejudice and had borne the burden of tax which entitled him to claim refund from the authorities, was never canvassed before the Supreme Court for consideration nor was it in fact considered by the Supreme Court. The Supreme Court, in the aforesaid decision, considered one aspect only under section 72, viz., liability of the authorities who have collected the tax to refund the same, but the question to whom it should be refunded and who are the persons who will be entitled to such refund was never posed for consideration before the Supreme Court and, therefore, the Supreme Court had no occasion to pronounce up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the Supreme Court in D. Cawasji's case, AIR 1975 SC 813, a binding ratio to the aforesaid effect which, according to the learned judge of the High Court, was the law declared by the Supreme Court under article 141 of the Constitution and even on the assumption that the observations in D. Cawasji's case, AIR 1975 SC 813, were obiter in nature, they were held to be binding on the High Court. Now, we have already shown earlier while discussing D. Cawasji's case, AIR 1975 SC 813, that the said decision of the Supreme Court does not contain any ratio to the effect that whether the burden of tax is passed on to the consumers or not, once it is shown that it was illegally collected by the taxing authority, it had to be refunded to the person from whom the tax was collected. We have shown that the said decision did not consider the question whether the tax had got to be refunded to the party from which it was collected even without showing that the party who claims refund had suffered any legal injury or not within the meaning of section 72 of the Contract Act. We have also shown that D. Cawasji's case, AIR 1975 SC 813, did not contain any obiter dicta on this aspect. In that view o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed refund solely on the ground of unjust enrichment. We have discussed in detail earlier, the ratio of the decisions of the three Division Benches of this court which have, after elaborate consideration of various aspects of the matter, centering round the legal requirements of section 72 of the Contract Act, have taken the view that unless the concerned plaintiff shows that it has suffered legal injury or prejudice, it cannot, merely on the ground that tax alleged to have been recovered is shown to be illegally' recovered, maintain a suit for refund under section 72 of the Contract Act. As such, the judgment of Shah J. in the aforesaid decision concurring with Lentin J. also cannot be of any assistance to the learned advocate for the plaintiff. Various decisions of High Courts taking a contrary view as listed in para 56 of the report were just mentioned by the learned judge without discussing their ratio in detail and without considering how and why these decisions of the other High Courts taking a contrary view- were not acceptable to the learned judge who decided the aforesaid case. In our view, therefore, the above Bombay High Court decision cannot be of any avail to the learne ..... X X X X Extracts X X X X X X X X Extracts X X X X
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