1965 (10) TMI 78 - SC - VAT and Sales Tax

Summary

Issues:
1. Suit barred by sections 13 and 20 of the Bombay Sales Tax Act, 1946 and sections 19 and 29 of the Bombay Sales Tax Act, 1952.
2. Suit barred by limitation.

Analysis:

Issue 1: Suit Barred by Sections 13 and 20 of the Bombay Sales Tax Act, 1946 and Sections 19 and 29 of the Bombay Sales Tax Act, 1952:
The case involved a registered dealer seeking recovery of advance sales tax paid under a mistake of law. The State of Bombay contended that the suit was barred by sections 13 and 20 of the Bombay Sales Tax Act, 1946, and sections 19 and 29 of the Bombay Sales Tax Act, 1952. The trial court held that the suit was not barred under these statutory provisions and was filed within the limitation period. The High Court affirmed this decision, stating that the suit was competent and not barred. The Supreme Court concurred, emphasizing that the machinery provided by the Act did not allow for challenges to the constitutional validity of payments made by the dealer. The Court held that sections 13 and 20 did not create an implied bar to the suit, thereby upholding the High Court's decision.

Issue 2: Suit Barred by Limitation:
The State of Bombay also argued that the suit was barred by limitation. The High Court applied the period prescribed by article 96 of the Limitation Act, 1908, which allowed for the filing of the suit within three years from the date on which the mistake became known to the taxpayers. The Supreme Court agreed with this assessment, noting that the plaintiff discovered the mistake on a specific date, and the suits were filed within the prescribed limitation period. The Court upheld the High Court's decision that the suit was not barred by limitation.

In conclusion, the Supreme Court dismissed the appeals, affirming the High Court's decision that the suit was not barred by the statutory provisions or limitation. The Court held that the registered dealer was entitled to seek recovery of the advance sales tax paid under a mistake of law, emphasizing the importance of the limitation period and the absence of implied bars under the relevant statutory provisions.