2008 (5) TMI 616 - HC - VAT and Sales Tax

Summary

Issues:
Refund of sales tax under the Delhi Sales Tax Act, 1975 on the ground of unjust enrichment.

Analysis:
The petitioner filed a writ petition seeking a refund of the amount deposited as sales tax under the Delhi Sales Tax Act, 1975. The petitioner claimed that the refund was due on merits but was denied based on the principle of unjust enrichment. The Sales Tax Officer rejected the refund application, stating that since the dealer had collected and deposited the tax with the Revenue, refunding it to the dealer would result in unjust enrichment. The issue of refund concerning unjust enrichment has been settled in previous judgments. The respondent referred to a Supreme Court decision highlighting that refunding excess tax paid would lead to unjust enrichment as dealers pass on the tax burden to consumers. The court agreed with this principle, emphasizing that unless the dealers prove they did not pass on the tax burden, refunding the tax would unjustly enrich them. The court cited another case where it was held that if taxes were collected from customers, refunding them to the dealer would be unjust enrichment. Since the petitioner did not dispute collecting taxes from customers, the court dismissed the writ petition, stating that refunding the tax would result in unjust enrichment, which is impermissible.

In conclusion, the court dismissed the writ petition seeking a refund of sales tax under the Delhi Sales Tax Act, 1975, on the grounds of unjust enrichment. The decision was based on the principle that refunding taxes to dealers who have already collected them from customers would lead to unjust enrichment, as established in previous judgments. The court emphasized the importance of proving that the tax burden was not passed on to customers before considering a refund. As the petitioner did not provide such proof, the court ruled against granting the refund to prevent unjust enrichment.