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TMI Blog2008 (11) TMI 387X X X X Extracts X X X X X X X X Extracts X X X X ..... . 6708 of 2008 - - - Dated:- 19-11-2008 - SINHA S.B. AND CYRIAC JOSEPH JJ. Sreegesh M.K., K.R. Sasiprabhu and R. Sathish, Advocates, for the respondents. R. Mohan, Additional Solicitor-General of India (V.B. Joshi, Kailash Pandey, Kumar and Mohd. Yasir Abbasi, Advocates, with him) for the appellant. -------------------------------------------------- The judgment of the court was delivered by S.B. SINHA J. Leave granted. The first respondent is a dealer in bullion gold. It entered into transactions of purchase of gold from the appellant herein during the period April 6, 1999 and December 10, 1999. The total transactions during the said period were for a sum of Rs. 42,37,48,518. Indisputably the rate of tax which was prevailing at the relevant time was one per cent. The amount of sales tax at the said rate was collected from respondent No. 1. The amount so collected, indisputably had been deposited with the sales tax authorities. On or about December 27, 1999 vide S.R.O. No. 1075/99 the rate of sales tax was reduced from one per cent to 0.5 per cent which was given a retrospective effect from April 1, 1999. The said notification reads thus: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unded'. Kindly note the same for your information." A writ petition was filed by the first respondent against the appellant before the High Court of Kerala questioning the validity of the said order. "(i) declare that the petitioner is liable to pay sales tax at per cent for the transactions referred to in exhibit P-2 and that collection of any amount in excess thereof is illegal and is liable to be refunded; (ii) issue a writ of mandamus or any other appropriate writ, order or direction directing the respondent to refund to the petitioner an amount of Rs. 20,97,261 with interest at 21 per cent per annum from the date of collection of the amounts shown in exhibit P-2 till the date of actual payment; (iii) issue a writ of certiorari or any other appropriate writ, order or direction quashing exhibit P-3;" The said writ petition was dismissed by a learned single judge of the said court by his order dated April 4, 2006 holding: "There cannot be any dispute that the petitioner is entitled to move the Commissioner. Whether the petitioner had to pay any tax in excess of the due rates and if so what is the fate of such excess payment is certainly a dispute. The petitioner has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to consider the same in its proper perspective. Mr. M.K. Sreegesh, learned counsel appearing on behalf of the first respondent, however, would submit that the notification should be construed keeping in view the objective it seeks to achieve as would appear from notification dated December 27, 1999. It was contended that the amendment had been brought into force with retrospective effect. The condition laid down therein must be held to have been repealed. Indisputably the gold in bulk quantity was sold by the bank within the State. Purchase was required to be effected at least worth Rs. 25 lakhs at a time. It was, however, felt that the intermediary dealers, who normally buy gold from the banks and primarily cater to the requirements of local gold- smith and jewellers, would not be in a position to carry out their activity since they would not be eligible for the reduced rate of 0.5 per cent when they buy the material from banks or other first sellers within the State. In the aforementioned situation, the Government had taken a decision to make the said rate of tax applicable when the bullion and specie are sold to any registered dealer within the State. The aforementioned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment or adjustment. " Article 265 of the Constitution of India mandates that no tax shall be levied or collected except by authority of law. In terms of the said provision, therefore, all acts relating to the imposition of tax providing, inter alia, for the point at which the tax is to be collected, the rate of tax as also its recovery must be carried out strictly in accordance with law. If the substantive provision of a statute provides for refund, the State ordinarily by a subordinate legislation could not have laid down that the tax paid even by mistake would not be refunded. If a tax has been paid in excess of the tax specified, save and except the cases involving the principle of "unjust enrichment", excess tax realized must be refunded. The State, furthermore is bound to act reasonably having regard to the equality clause contained in article 14 of the Constitution of India. It is not even a case where the doctrine of unjust enrichment has any application as it is not the case of the respondent/State that the buyer has passed on the excess amount of tax collected by it to the purchasers. In view of the admitted fact that tax had been collected and paid for the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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