1965 (12) TMI 105 - SC - VAT and Sales Tax

Whether a certain amount is lawfully due or not, must be determined by the Assistant Commissioner in making the order of assessment or reassessment? Held that - Appeal allowed. The Assistant Commissioner appointed under the Act is within the limits of his jurisdiction and authority competent to decide all the questions which arise before him his orders, it is true, are liable to be set aside in appeal or modified in revision as provided by the Act. But under the Act the Assistant Commissioner-who exercises the powers of the Commissioner-has no power to review his decision, nor is he authorised to ignore his previous order, and to pass an order for refund inconsistent with his previous order which has not been set aside by appropriate proceedings.

Summary

Issues:
1. Interpretation of section 13 of the Central Provinces and Berar Sales Tax Act.
2. Validity of the amendment to section 13 with retrospective effect.
3. Examination of the claim for refund under the amended section 13.

Detailed Analysis:
The judgment revolves around the interpretation of section 13 of the Central Provinces and Berar Sales Tax Act, specifically regarding the right to claim a refund of tax paid in excess of the amount due. The respondent, after being assessed for tax on his business turnover, applied for a refund on the grounds that certain charges were not taxable. The Assistant Commissioner rejected the application, which was later set aside by the Board of Revenue, directing a fresh disposal based on legal principles established in a previous case.

The State contended that an amendment to section 13 with retrospective effect eliminated the right to obtain refunds in similar cases. The High Court, however, held that the right to a refund was a substantive right granted by the statute and could not be taken away without clear and unambiguous language in the amendment. The High Court answered specific questions posed by the Board of Revenue, affirming the validity of the original section 13 and rejecting the retrospective effect of the amendment.

The judgment emphasizes that the authority to grant a refund under section 13 lies with the Commissioner, based on the amount not lawfully due from the dealer. It highlights that until an assessment order is set aside or modified through appropriate proceedings, the dealer cannot demand a refund contrary to the original order. Reference is made to legal precedents emphasizing the finality of assessment orders until challenged through proper channels.

The judgment also references a case from the Bombay High Court, illustrating a similar interpretation of the law where an application for refund cannot be entertained based on an erroneous view of the law unless the order is overturned through appeal or revision. Ultimately, the Court concludes that the application for a tax refund under the original section 13 of the Act was not maintainable, leading to the dismissal of the respondent's claim and allowing the appeal by the State of Maharashtra.

In conclusion, the judgment clarifies the limitations on claiming tax refunds under the Sales Tax Act, emphasizing the finality of assessment orders until challenged through prescribed procedures. It underscores the importance of clear statutory language in amending substantive rights and upholds the decision to disallow the refund claim based on the original section 13 provisions.