1971 (8) TMI 199 - HC - VAT and Sales Tax

Summary

Issues:
- Assessment of sales tax on braided cords, ribbons, and tapes under Madras General Sales Tax Act and Central Sales Tax Act.
- Refusal of appellate authority to rectify assessment orders based on subsequent court decision.
- Petitioners seeking refund of taxes paid under the mistake of law or fact.
- Jurisdiction of the court to issue writs of certiorari and mandamus for refund of taxes.

Analysis:
The petitioners, engaged in the business of braided cords, ribbons, and tapes, were assessed for sales tax under the Madras General Sales Tax Act and the Central Sales Tax Act for the years 1963-64, 1964-65, and 1965-66. They contended that the turnover related to braided cords and tapes should not be included in the assessable turnover. However, the appellate authority did not accept this contention. Subsequently, a court decision held that braided cords are not subject to sales tax under the mentioned Acts. The petitioners then sought rectification of the assessment orders under section 55 of the Madras General Sales Tax Act, but the appellate authority found no error to be rectified.

The court emphasized that Article 226 of the Constitution cannot be used for tax refund when taxes were collected under properly made assessment orders. The petitioners cannot rely on a subsequent court decision to claim a refund, as they did not challenge the original orders timely. The court stated that the only way for the petitioners to seek relief is through a civil suit. The court dismissed the writ petitions seeking certiorari for quashing the appellate authority's orders, as there was no error in the orders at the time of assessment. Therefore, the court held that the appellate authority rightly refused to rectify the orders, and the writs of certiorari were not maintainable.

Regarding the petitioners' request for a mandamus to compel a tax refund, the court held that there was no public duty on the respondent to refund the amounts claimed. The court reiterated that the jurisdiction of the court cannot be utilized to obtain a refund of taxes paid to implement a lawful assessment order. Consequently, the court dismissed the writ petitions seeking a mandamus for tax refund, stating that there was no obligation on the respondent to act in that regard.

In conclusion, the court dismissed all the petitions, emphasizing that the petitioners cannot seek tax refunds through writ petitions under Article 226, as the taxes were paid under valid assessment orders, and there was no error in the orders at the time of assessment.