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TMI Blog1958 (10) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... ment treasury. The above reference arises under the following circumstances. In the U.P. Sales Tax Act, U.P. Act No. XV of 1948, the word "sale" was defined in clause (h) of section 2 and in the definition it was stated that it would include "forward contracts." The Sales Tax Department of the State Government accordingly started assessing sales tax on forward transactions as well. One of the assessees, by name Budh Prakash, moved a writ petition in this Court challenging the vires of the definition of "sale" given in the Sales Tax Act in so far as it purported to include forward transactions within its ambit. The matter came up for consideration by a Division Bench of this Court, and the Division Bench upheld the contention of Budh Prakash on the ground that the word "sale" in the relevant entry in Schedule 7 of the Government of India Act did not include forward transactions and the U.P. Legislature had no jurisdiction to legislate with respect to them or to impose a tax on those transactions. The State Government took the matter to the Supreme Court of India and the Supreme Court upheld the decision of this Court. The decision of the Supreme Court is reported in Sales Tax Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Question No. (2).-"Whether section 8-A (4) of the Sales Tax Act gave any authority to the Sales Tax Authorities to refuse the refund of the sales tax wrongly levied and realised on forward transactions? Question No. (3).-Whether in the circumstances of the case, section 8-A(4) of the U.P. Sales Tax Act is at all applicable and is not ultra vires of the U.P. Legislature?" The judge (Revisions) formulated the following questions for the decision of this Court in his referring order: "(1) Whether any taxes which have been deposited by any dealers on forward transactions (before or after the issue of the notices of demand) are refundable in all or any of the following cases: (a) Where the taxes have been paid by the dealers from their own pockets without recovering the amounts from the customers; (b) Where the taxes have been debited in the account by the dealers against the customers (but the amounts have not been recovered); (c) Where the taxes have actually been recovered by the dealers from the customers? (2) If the taxes are refundable in all or any of the cases mentioned in the first question, what is the period within which the refund can be claimed?" When Sales Tax Reference No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arose in this reference and should be allowed to be urged and that the observations made by this Court in its order dated the 20th December, 1956, that that question had not been referred to the Court in this reference and the question was open need not be taken to be a final decisions of this Court on that point. Mr. Jagdish Swarup, learned counsel appearing for the assessee, agrees that the question under section 8-A (4) is a question requiring determination in this reference. We accordingly allowed the learned Advocate-General to submit what he had to say both with respect to the circumstances which could disentitle the assessee from (1) Since reported in [1958] 9 S.T.C. 747. claiming the refund and with respect to the applicability and effect of section 8-A(4) of the Sales Tax Act. The questions formulated in the referring order require to be recast to bring out fully what was contemplated by the parties from the questions of law formulated by them for reference to this Court. We will reframe them as follows: "(1) Whether any sales tax which has been deposited by any dealer on forward transaction before or after the issue of notice of demand is refundable on the ground of the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had paid money by mistake, should not suffer on that account. Besides these three circumstances, the other point which the learned Advocate-General has urged is that the dealer is bound to deposit this amount, which he claims as refund, in the Government treasury, in view of the provisions of section 8-A (4) of the Sales Tax Act, as this amount of tax had been realised by him as a tax on sale of goods, when no tax was payable in respect of that sale. It may be mentioned that the learned Advocate-General does not dispute that the amount deposited by the dealers, who have not realised it from the customers, is to be refunded. He has alleged no circumstances which would justify the non-refunding of the amount to such dealers. The referring order indicates that out of 1318 cases sought to be referred by the Commissioner of Sales Tax, 1040 are the cases in which, according to the State, the amounts were actually paid by the dealers themselves from their own pockets. We are of opinion that none of the circumstances urged disentitles the assessee from getting the refund to which he is entitled under section 72 of the Contract Act, as held by the Supreme Court in its Civil Appeal No. 87 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Whether the principle of estoppel applies or there are circumstances attendant upon the transaction which disentitle the respondent to recover back the moneys, depends upon the facts and circumstances of each case. No question of estoppel can ever arise where both the parties, as in the present case, are labouring under the mistake of law and one party is not more to blame than the other. The other circumstances would be such as would entitle a court of equity to refuse the relief claimed by the plaintiff because on the facts and circumstances of the case it would be inequitable for the court to award the relief to the plaintiff. These are, however, equitable considerations and could scarcely be imported when there is a clear and unambiguous provision of law which entitles the plaintiff to the relief claimed by him. No such equitable considerations can be imported when the terms of section 72 of the Indian Contract Act are clear and unambiguous." We take this judgment of the Supreme Court to hold that a person, who has paid money to another by mistake, be it of fact or law, is entitled to get back the money and his title to get back the money may, however, be lost to him on acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e tax as a tax from his purchaser that he has to comply with the requirements of sub-section (3). The other question, that it would be inequitable to make a gift of this money to the assessee when it is not possible for him to refund it to the customer, is not material. We have already quoted from the judgment of the Supreme Court that any equitable consideration has no place in determining the rights of the assessee to get back his tax and no such consideration can certainly take away the right which the assessee otherwise possesses. Further, it may be said that it is not possible to say as a fact that the assessee will not be able to refund the realised tax to the customers. The taxes have been realised on forward transactions and it is likely that a record has been maintained of these transactions. It cannot be denied that the customer has a right to a refund of the money from the assessee, and the question whether his claim now would be barred by time is, to say the least, highly controversial. The third circumstance, i.e., the fact that the assessee had realised tax from the customer and has not suffered any loss, is not any reason to disentitle the dealer-assessee from ge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he prescribed manner. (4) Without prejudice to the previsions of clause (f) of section 14, the amount realized by any person as tax on sale of any goods, shall, notwithstanding anything contained in any other provision of this Act, be deposited by him in a Government treasury within such period as may be prescribed, if the amount so realized exceeds the amount payable as tax in respect of that sale or if no tax is payable in respect thereof." The contention of the learned Advocate-General is that the assessee realised the tax from the customers in connection with the forward transaction treating such transaction as a sale and that now that it had been held that a forward transaction does not amount to a sale and that no tax could be assessed on its basis, the dealer had to pay the amount of such tax realised in the Treasury. We are of opinion that what subsection (4) contemplates to be deposited is the amount which a person collects as tax on a transaction which is in reality a sale transaction and not what he collects as a tax on a transaction treating it to be a sale transaction. The expression "as tax on sale of any goods" simply means that the amount realised should be real ..... X X X X Extracts X X X X X X X X Extracts X X X X
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