2007 (7) TMI 588 - HC - VAT and Sales Tax

Summary

Issues:
Refund of entry tax deposited under protest, vires of the Bihar Tax on Entry of Goods Act, principles of unjust enrichment, whether the amount can be termed as "collected from the consumers."

Analysis:
The petitioner sought a refund of Rs. 81,75,000 deposited as entry tax under protest between July 30, 2003, and March 17, 2004, under the Bihar Tax on Entry of Goods Act, 1993. The vires of the Act were challenged in a previous writ petition, which resulted in a judgment declaring the Act ultra vires on August 23, 2006. Post this judgment, the petitioner requested a refund from the respondents, leading to the current writ application for the same.

The respondents contended that the judgment declaring the Act ultra vires would have prospective effect, implying the petitioner was not entitled to a refund. Additionally, they argued that the amount deposited might fall under the doctrine of unjust enrichment as per the Supreme Court's ruling in Mafatlal Industries Ltd. v. Union of India [1998] 111 STC 467.

The crucial issue revolved around whether the deposited amount could be considered as "collected from the consumers." The petitioner clarified that they had not passed on the burden of the tax to any consumers or third parties. The counter-affidavit filed by the respondents did not refute this specific statement, and in light of previous interim orders and the uncontested statement in the writ petition, the court had no choice but to allow the writ application.

Consequently, the court directed the respondents to refund the deposited amount along with six percent interest per annum within four weeks from the date of the judgment. The writ petition was allowed in favor of the petitioner based on the lack of evidence supporting the respondents' contentions and the uncontested facts presented by the petitioner.