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TMI Blog1986 (10) TMI 151X X X X Extracts X X X X X X X X Extracts X X X X ..... d facts. Section 10(1) of the Goa, Daman Diu Sales Tax Act, 1964, for short the Goa Sales Tax Act, provides that no tax shall be payable under the said Act on the sale of the goods specified in the second schedule subject to the conditions and exceptions set out therein. In exercise of the powers under Section 10(2), the first respondent added Entry 68 to the Second Schedule by a Notification, dated 2nd November, 1972 and goods manufactured, processed or assembled in the Union Territory of Goa, Daman and Diu at the point of sale by Small Scale Industries were totally exempted from the local sales tax for a period of five years from the date of its registration with the Directorate of Industries, Government of Goa, Daman Diu. Then, by another Notification, dated 5th July, 1983, Entry 68 was again amended and goods manufactured, processed or assembled in the Union Territory of Goa, Daman Diu by a Small Scale Industry set up on or after the date of coming into force of the said Notification which has not gone into production and has not effected any sales of such goods manufactured, processed or assembled by it on any day prior to the day of coming into force of the Notificati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e sales of their goods as had been held by the Division Bench in the said Writ Petition. Personal hearing was given to the petitioners and ultimately, by three separate Orders, dated 26th June, 1985 pertaining to the assessment years ending respectively on 3lst December, 1981, 3lst December, 1982 and 3lst December, 1983, the second respondent held that petitioners are exempted from payment of Central Sales Tax in respect of Inter State sales of their goods, but he rejected the prayer for refund on the grounds that the petitioners were not entitled to the claimed refund, on one hand, as they had given up such claim at the time of the admission of the writ petition No. 21/84 and on the other, because such refund would give cause to unjust enrichment. He however, did not pass an assessment order as regards the assessment year ending on 3lst December, 1984. 5. Petitioners then filed in August, 1985 a Writ Petition, being the present Writ Petition No. 161/85 challenging the said three assessment Orders dated 26th June, 1985 and further prayed for a writ of mandamus directing the respondents to, inter alia, forthwith pass the assessment order pertaining to the year ending on 3lst Decem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o them and could not be granted by the Court. Thirdly, the petitioners had not pressed the prayer in prayer (b)(iv) in the said Writ Petition as it was always open to an assessee to invoke the machinery laid down for refund under Section 19 of the Goa Sales Tax Act, without therefore seeking a high prerogative writ. In the circumstances, he contended the second respondent could not have refused the refund of the Tax on the ground that prayer for refund has not been pressed by the petitioners in Writ Petition No. 21/84. 8. It was however contended by Mr. Nadkarni, the learned Government Advocate, that the refund sought by the petitioners is not available to them since they had given up the said claim at the time of the admission of the Writ Petition No. 21/84. He urged that the Order, dated 20th February, 1984, though passed at the admission stage, is final in nature inasmuch as consequent upon the petitioners not pressing the said prayer (b)(iv), rule has been issued with exclusion of the said prayer. Thus, the principles of res judicata operate and it is not open to the petitioners to reagitate the issue and seek the same relief in a fresh proceeding. The principles of res judic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d s case. We are, therefore, inclined to accept the submission of Mr. Hidayatullah that, at the time of the admission of the Writ Petition No. 21/84, the petitioners having realised in view of the said rulings that the prayer (b)(iv) could not be granted by the Court, did not press it. There is, in these circumstances, great force in the contention that petitioners, did not give up their claim for the refund of Central Sales Tax paid and merely abstained from getting such refund by means of an order or direction of this Court to the respondents to that effect. It is not thus possible to accept the view that by not pressing the said prayer (b)(iv), petitioners gave up forever their claim for that refund. It is no doubt true that, as a result, the rule was issued only in respect of other prayers, but the only consequence thereof was that the said prayer was no more alive and hence, the relief sought through it could not be granted in the Writ Petition No. 21/84, without however precluding the petitioners from obtaining the refund by other means available to them under law. Mr. Nadkarni was therefore wrong when he submitted that the petitioners were barred from filing a fresh writ pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had given up such claim by not pressing prayer (b)(iv) in the Writ Petition No. 21/84. 11. We now turn to the next contention of Mr. Hidayatullah according to which the defence based on the theory of unjust enrichment to refuse the restitution of illegally collected taxes is not available in a case where a tax is levied and collected without the authority of law. Elaborating, the learned counsel urged that the State cannot keep moneys illegally collected by way of tax as this would be violative of the mandate in Article 265 of the Constitution and that, as such, it follows that refund of moneys so collected to the person from whom they were collected is a necessary corollary. He submitted that this is the law laid down by the Supreme Court in M/s. D. Cawasji and Co. v. State of Mysore and another (A.I.R. 1975 S.C. 813) = 1978 E.L.T. (J154)(S.C.) which has been consistently followed by this Court, inter alia, in Maharashtra Vegetable Products Pvt. Ltd. and another v. Union of India and others (1981 E.L.T., 468), Wipro Products Ltd. and Another v. Union of India and Another (1981 E.L.T., 531), Leukoplast (India) Ltd. v. Union of India and Others (1983 E.L.T., 2106), Golden Tobacco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .I.R. 1980 S.C. 1037), The Sales Tax Officer, Banaras and others v. Kanhaiya Lal Makund Lal Saraf (A.I.R. 1959 S.C. 135) and in M/s Amar Nath Om Parkash and others v. State of Punjab and others (A.I.R, 1985 S.C., 218), though based on the specific provisions of the Acts applicable to those cases, can safely be applied also to other cases inasmuch as the amount was not paid by the respondents in that case from their coffers; and that there was no question of refunding the amount to the respondents who had not eventually paid the amount towards the fund, for doing so would virtually amount to allow the respondents unjust enrichment. Mr. Nadkarni then contended that, as their Lordships of the Supreme Court observed, the principles laid down in Orient Paper Mills, Shiv Shanker Dal Mills, Kanhaiya Lal Makund Lal Saraf and Amar Nath Om Parkash can be applied to other cases inasmuch as the moneys collected had not come from the coffers of the person claiming the refund thereof and therefore, refund is to be refused since it would amount to unjust enrichment, it is apparent and obvious that law has been laid down to the effect that taxes collected without authority of law are not to be ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view would be to enable a person to recover the amount paid as tax even after several years of the date of payment, which if some other party would successfully challenge the validity of the law under which the payment was made and if only a suit or writ petition is filed for refund by the person within three years from the date of declaration of the invalidity of the law; and that that might both be inexpedient and unjust so far as the State is concerned. Then, in paragraph 10, Their Lordships proceeded as under:- A tax is intended for immediate expenditure for the common good and it would be unjust to require its repayment after it has been in whole or in part expended, which would often be the case, if the suit or application could be brought at any time within three years of a court declaring the law under which it was paid to be invalid, be it a hundred years after the date of payment. Nor is there any provision under which the court could deny refund of tax even if the person who paid it has collected it from his customers and has no subsisting liability or intention to refund it to them, or, for any reason, it is impracticable to do so , (emphasis supplied). And lastly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ya Bharat. After the merger, the Madhya Bharat Essential Supplies (Temporary Powers) Act, 1948 came into force. By a Notification, dated 5th September, 1949, the Madhya Bharat Government, in exercise of the powers vested under the said Act, included sugar in the list of articles as an essential commodity and by another notification also, dated 5th September, 1949, delegated its powers to issue orders under the said Act in favour of the Director, Civil Supplies, Madhya Bharat. In the exercise of the powers conferred on him under the Madhya Bharat Sugar Control Order, 1949, the Director of Civil Supplies issued a notification dated, 14th January, 1950 fixing ex-factory price for different sugar factories. Under the said notification, all sugar factories in Madhya Bharat were to supply and despatch sugar of Grade E-27 at the rate of Rs.32.40 per maund F.O.R. destination. The supply price was a little higher than the ex-factory price and the difference between the supply price and the ex-factory price was to be credited to Madhya Bharat Government Sugar Fund. The Jeora Sugar Mills did not deposit the said amount, but ultimately, after several demands, deposited, under protest, an amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly, the observations made in Vyankatlal s case are on the facts of that case and therefore, do not lay the law on the subject. . 17. We already stated that that in Cawasji s case, the Supreme Court has in clear and unambiguous terms laid down that if a Tax is paid under a mistake of law or is collected without the authority of law, this amount of the Tax paid has to be refunded even if the person who paid it has collected it from his customers and has no subsisting liability or intention to refund it to them or, for any reason, it is impracticable to do so. Cawasji s case was one In respect of Taxation, more particularly, relating to refund of Tax, unlike Vyankatlal s case. In the latter case, in fact, the question was as regards the fixation of price and the observations made were strictly on the facts of that particular case, where the difference of price collected was meant for the Government Sugar Fund. It was in this context that the Supreme Court observed that, in the particular facts of that case where the said difference of price has been paid by the consumers and not by the Jeora Sugar Mills and where the said difference was to be credited to the Sugar Fund, the princip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bly be couched on the ground of mistake of law since what has been challenged was the assessment order itself. The Writ Petition No.21/84 was not filed for getting the refund of the Sales Tax paid under a mistake of law but to challenge the validity of a wrong assessment order. In any event, the learned counsel contended, the law laid down in Vallabh Glass Works case has not been followed by this Court in Shalimar Textile Mfg. Pvt. Ltd. v. Union of India and others [1986 (25) E.L.T., 625] and in Parle Products Limited (supra). He further contended that the law as laid down in Cawasji s case had been interpreted in two earlier decisions of this Court and it has been held that, on the principles laid down in the said case by the Supreme Court, refund can be granted for more than three years from the date of filing of the writ petition, although the petition has to be filed within three years from the date on which the mistake of law is discovered. Mr. Hidayatullah then urged that even if there is a mistake in the interpretation of the said judgment of the Supreme Court, the decisions of this Court will be binding on this Court as has been held in Panjumal Hassomal Advani v. Harpal S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... two decisions of this Court (Shalimar Textiles and Parle Products) interpreting Cawasji s case on the said point, and hence, we, are, in any case, bound by them as held in Panjumal Hassomal Advani v. Harpal Singh Abnashi Singh Sawhney and others (A.I.R. 1975 Bombay, 120). It will also be useful to mention that we are fortified in the view we have taken by the decision of the Supreme Court in Auriaya Chamber of Commerce, Allahabad s case (supra) as Their Lordships observed that if a mistake either of law or of fact is established, the assessee is entitled to recover the money and the party receiving them is bound to return it, irrespective of any other consideration. 20. Mr. Hidayatullah has prayed in this case for interest at 21% from the date of the collection till the date of refund. Mr. Hidayatullah has emphasized the fact that although the judgment in Writ Petition No.21/1984 was delivered by Rege Kamat, JJ. on 13-12-1984 wherein it was made abundantly clear that the petitioners were not liable to pay the Inter State Tax, the Department persisted in refusing to refund the tax paid under a mistake of law. Mr. Hidayatullah therefore submitted that in view of this attitude on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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