1968 (6) TMI 62 - HC - VAT and Sales Tax

Summary

Issues:
1. Validity of retrospective amendment to section 5(5A) of Mysore Sales Tax Act, 1957
2. Competence of Commercial Tax Officer to demand repayment of refunded tax
3. Legislative validation of refund under section 34 of the amending Act
4. Requirement of rectification under rule 38 of Mysore Sales Tax Rules before demanding repayment

Analysis:

1. The judgment concerns the assessment year 1957-58, where the turnover of the petitioner was included in the assessment by the Commercial Tax Officer. A previous court order set aside part of the assessment based on the interpretation of section 5 of the Mysore Sales Tax Act, 1957. However, a retrospective amendment through the Mysore Sales Tax (Amendment) Act, 1963 validated the inclusion of the turnover in the assessment, contrary to the previous court order.

2. The petitioner sought a refund of the tax attributed to the turnover excluded based on the court order. The Commercial Tax Officer demanded repayment post the retrospective validation of the assessment. The petitioner argued that the demand lacked competence. The court rejected this argument, stating that the refund made by the Officer was not under the principal Act but due to the court's direction, hence not validated under section 34 of the amending Act.

3. The court dismissed the claim that the refund was legislatively validated under section 34. It clarified that refunds authorized by the Act are different from those made due to court directions. The court emphasized that the refund in question was not authorized by the Act but was a result of the court's order, thus not falling under the legislative validation.

4. The petitioner contended that the demand for repayment should be preceded by a rectification under rule 38 of the Mysore Sales Tax Rules. The court refuted this argument, highlighting that the retrospective validation of the assessment rendered it valid from the beginning. As the assessment was now deemed proper, the petitioner was liable to pay the tax that was refunded earlier. Rectification was deemed unnecessary, as the assessment order no longer suffered from the previous infirmity.

In conclusion, the court dismissed the revision petition, emphasizing that the demand for repayment was valid post the retrospective validation of the assessment, and rectification was unnecessary in this context.