1971 (11) TMI 152 - HC - VAT and Sales Tax

Summary

Issues:
1. Entitlement to a refund of sales tax collected and paid over to the revenue.
2. Delay in seeking refund and failure to avail statutory remedies.
3. Exercise of discretion under Article 226 of the Constitution.

Analysis:
1. The petitioners sought a refund of sales tax collected and remitted to the revenue for the assessment year 1966-67. They relied on a Supreme Court decision in Khosla and Co. v. Deputy Commissioner of Commercial Taxes, claiming entitlement to a refund based on a mistake of fact in the levy of tax. The court noted that the petitioners did not claim any exemption or challenge the final assessment order's legality. Previous decisions indicated that a refund might be granted even after the final assessment, but recent judgments emphasized the need for timely action and expression of grievance. The court highlighted the importance of not circumventing other remedies and the discretion of the court in granting refunds, considering factors like delay and lack of earlier complaints by the petitioners.

2. The court emphasized that considerable time had passed since the final assessment order, and the petitioners had not availed themselves of statutory remedies like filing appeals. The delay in seeking a refund and the lack of earlier grievances against the assessment order were seen as significant factors in denying the refund claim. The court cited precedents where failure to utilize statutory remedies precluded seeking relief under Article 226, as it would bypass established legal procedures. The petitioners' failure to act promptly and their delay in approaching the court were key reasons for rejecting their refund request.

3. Despite the petitioners' arguments that there was no undue delay and they had diligently pursued the matter in court, the judge declined to exercise discretion under Article 226 to grant the refund. The court considered the overall circumstances, including the petitioners' lack of complaints earlier, their failure to settle similar matters with authorities in the past, and the delay in seeking relief after the Khosla case. The judge concluded that the petitioners' actions did not warrant upsetting a settled final assessment order and denied the discretionary relief sought, ultimately dismissing the petition without costs.

In conclusion, the judgment underscores the importance of timely action, expression of grievances, and adherence to statutory remedies in seeking refunds of taxes paid. It highlights the court's discretion under Article 226 and the need to consider various factors, including delay and lack of earlier complaints, in deciding on refund claims. The judgment serves as a reminder of the legal principles governing refund requests and the court's role in balancing the interests of parties involved in tax matters.