1980 (4) TMI 291 - HC - VAT and Sales Tax

Issues Involved:
1. Classification of commodities as "oil-seeds" under the Central Sales Tax Act.
2. Validity of assessment orders and jurisdiction.
3. Refund of excess tax collected.
4. Delay and laches in filing the petitions.
5. Incidence of sales tax and unjust enrichment.

Detailed Analysis:

1. Classification of Commodities as "Oil-Seeds" under the Central Sales Tax Act:
The petitioners, registered dealers under the M.P. General Sales Tax Act, 1958, argued that commodities such as jeera, ajwain, somph, methi, and dania should be classified as "oil-seeds" under section 14(vi) of the Central Sales Tax Act. They cited the Supreme Court's decision in Dinabandhu Sahu's case, where these commodities were treated as "oil-seeds" for a lower tax rate. However, the court clarified that the Supreme Court's decision was based on specific facts and circumstances of that case and did not universally declare these commodities as "oil-seeds." Therefore, the petitioners' reliance on Dinabandhu Sahu's case did not furnish any cause of action for their relief.

2. Validity of Assessment Orders and Jurisdiction:
The court held that the judgment in Dinabandhu Sahu's case did not render any provision of the M.P. General Sales Tax Act ultra vires or unconstitutional. The assessment orders under which the tax was paid were valid and within the jurisdiction of the taxing authorities. The court emphasized that the assessments were not made in contravention of any constitutional provision, and therefore, the payment of taxes was made under valid assessment orders.

3. Refund of Excess Tax Collected:
The court noted that refund of tax can only be directed when an assessment order has been annulled. The petitioners did not follow the normal machinery provided under the Act to challenge the assessments, which had become final. The court cited various precedents, including Venkataraman & Co. v. State of Madras and Dhulabhai v. State of M.P., to support the view that assessments made under a wrong entry do not render them a nullity. Therefore, no refund could be granted to the petitioners.

4. Delay and Laches in Filing the Petitions:
The court observed that the petitions were filed nearly three years after the Supreme Court's judgment in Dinabandhu Sahu's case. The court emphasized that relief under article 226 of the Constitution can be denied to a party who does not invoke the court's jurisdiction expeditiously. The court referred to the Supreme Court's decisions in State of M.P. v. Bhailal Bhai and Tilokchand Motichand v. H.B. Munshi, which highlighted the importance of utmost expedition in such claims. The court found no satisfactory explanation for the delay and dismissed the petitions on the ground of undue delay.

5. Incidence of Sales Tax and Unjust Enrichment:
The court reasoned that sales tax is an indirect tax, and the incidence is ultimately shifted to the consumers. The petitioners likely recovered the sales tax from the purchasers. Allowing the petitioners a refund would result in unjust enrichment, making them doubly rich. The court cited the Andhra Pradesh High Court's decision in Gurram Sreeramulu, Garlapati Anjaneyulu & Co. v. State of A.P., which held that discretionary relief of refund should not be granted if it results in retention of the tax collected from the public and imposes a burden on the State.

Conclusion:
The court dismissed the petitions on multiple grounds, including the lack of a valid cause of action based on Dinabandhu Sahu's case, the validity and jurisdiction of the assessment orders, the failure to challenge the assessments through the normal machinery, undue delay in filing the petitions, and the principle of unjust enrichment. There was no order as to costs, and the security amount was directed to be refunded to the petitioners.

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