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Issues involved: Limitation period for filing a civil suit for recovery of amounts paid towards agricultural income tax assessment.
The Division Bench of the High Court held that the limitation to lay the suit started on January 1, 1968, when the High Court had earlier quashed the assessment of agricultural income tax. The appellants had made partial payments towards the tax liability, and the suit for recovery was filed in 1974. The trial court decreed the suit in 1976, but the Division Bench found it barred by limitation. Details of the Judgment: The appellants argued that the limitation period should start from October 5, 1971, when the appeal filed by the State was dismissed by the Court. However, the Court disagreed, stating that the limitation began running from January 1, 1968, when the assessment was quashed by the High Court. The Court cited Section 3 of the Limitation Act, emphasizing that once the limitation starts running, it continues until interrupted by a court order. The Court highlighted that the knowledge of the mistake of law cannot extend the limitation period until the appeal is disposed of, unless the operation of the previous judgment is stayed by the Court. Since the appellants were aware of the assessment being quashed, the cause of action to file the suit for refund arose at that time. Therefore, the suit was deemed barred by limitation. Referring to a previous case, the Court noted that the claim for refund would start from the judgment rendered by the Court if the party acquired knowledge before the judgment. However, in this case, the appellants were involved in the proceedings and had the assessment quashed, leading to the cause of action for the suit arising at that point. The Court concluded that the suit was indeed barred by limitation. In conclusion, the appeal was dismissed, and no costs were awarded.
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