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TMI Blog1970 (3) TMI 157X X X X Extracts X X X X X X X X Extracts X X X X ..... r any appeal and the assessment orders became final. The petitioners paid a total tax of Rs. 41,260.61 for those assessment years. W.P. No. 1426 of 1967 is for the refund of this tax. For the assessment years 1961-62 to 1964-65, the petitioners claim exemption on the same grounds in respect of their turnover of "green ginger" and "garlic" but their claim was rejected and that the turnover was subjected to sales tax. The petitioners filed appeals against these assessment orders. The appeals against the assessment orders for the years 1961-62, 1962-63 and 1964-65 were dismissed by the Assistant Commissioner, Commercial Taxes, Guntur. An appeal against the assessment order for the year 1964-65 was, however, allowed but only to the extent of the turnover of sales representing "green ginger" by the petitioner directly. The petitioners carried the matters in appeals to the Sales Tax Appellate Tribunal in T.A. No. 861/64 [1961-62], T.A. No. 95/65 [1962-63], T.A. No. 865/65 [1963-64] and A.R. No. 193/66 [1964-65]. The Sales Tax Appellate Tribunal held "green ginger" to be a "vegetable" and, therefore, exempt from tax under the aforesaid G.O., viz., G.O. Ms. No. 1091, Revenue, dated 10th J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... some other assessee by an order dated 5th July, 1968, held that "garlic" was also a "vegetable" within the meaning of G.O. Ms. No. 1091, Revenue, dated 10th June, 1957, and the turnover in respect thereof was also exempt from tax. The petitioners contend that the respondents acted illegally and without jurisdiction in collecting the sales tax in respect of the turnover of green ginger and garlic. They claim that they discovered their mistake in paying sales tax on the turnover of "green ginger" and "garlic" only after the decision of the Tribunal and that they are entitled to refund of the tax paid by them under section 72 of the Indian Contract Act. The respondents opposed these petitions on the ground that the assessment orders having become final and not having been set aside by any competent authority, the collection of the tax cannot be held to be either illegal or without jurisdiction and, therefore, they are not entitled to any refund. They urged that the petitioners have allowed the alternative remedy of questioning the correctness of the assessment orders to become barred by limitation and are, therefore, precluded from invoking the jurisdiction of the High Court. They al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er a person is entitled to the relief of refund of tax under article 226 of the Constitution of India which tax was paid under a void legislation and in that context observed: "That the maximum period fixed by the Legislature as the time within which the relief by a suit in a civil court must be brought may ordinarily be taken to be a reasonable standard by which delay in seeking remedy under article 226 of the Constitution can be measured. The court may consider the delay unreasonable even if it is less than the period of limitation prescribed for a civil action for the remedy, but where the delay is more than this period, it will almost always be proper for the court to hold that it is unreasonable." Applying that test their Lordships in that case upheld the order of refund directed, in cases which were filed within three years of the discovery of mistake, and upheld the rejection of the claim of refund in cases filed beyond three years. In another decision relied upon by the learned counsel for the petitioners in State of Kerala v. Aluminium Industries Ltd.[1965] 16 S.T.C. 689 (S.C.)., their Lordships of the Supreme Court held that: "money paid under a mistake of law comes wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... right. Before ordering refund the court has to take into account if the claimant is not precluded on the ground of delay or on the ground that he has placed the other side in such a position as it would estop him or has given up his right or has done some similar act disentitling him to claim this discretionary relief under article 226 of the Constitution. In State of Madhya Pradesh v. Bhailal Bhai [1964] 15 S.T.C. 450 (S.C.)., Das Gupta, J., speaking for the court while holding that the High Courts have power for the purpose of enforcement of fundamental rights and statutory rights to give consequential relief by ordering repayment of money realised by the Government without the authority of law, held: "At the same time we cannot lose sight of the fact that the special remedy provided in article 226 is not intended to supersede completely the modes of obtaining relief by an action in a civil court or to deny defences legitimately open in such actions. It has been made clear more than once that the power to give relief under article 226 of the Constitution is a discretionary power. This is specially true in the case of power to issue writs in the nature of mandamus. Among the se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the refund was reversed and where the petitions were filed beyond three years the order dismissing the writ petition was upheld. Even in State of Kerala v. Aluminium Industries Ltd.[1965] 16 S.T.C. 689 (S.C.)., the principles enunciated in State of Madhya Pradesh v. Bhailal Bhai[1964] 15 S.T.C. 450 (S.C.). , were followed. Thus a careful reading of the above decision of the Supreme Court makes it abundantly clear that no one is entitled to the relief of refund of moneys paid under mistake by way of a petition under article 226 of the Constitution of India, as a matter of course, no sooner than it is found or admitted that the amount was paid by the petitioner and received by the respondents under a mistake mutual to both the parties. This right to refund is still subject to other consideration of estoppel, waiver, limitation or the like. It may be that, as observed in that very decision and also in State of Kerala v. Aluminium Industries Ltd. [1965] 16 S.T.C. 689 (S.C.)., where money is paid under a mistake which is common to both the parties no question of estoppel arises but yet there may be other considerations of limitation and the like. After all, issuance of a writ of mandam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 226 of the Constitution filed for refund of tax is filed without unreasonable delay. This court has held in Eluru Venkata Subba Rao v. District Transportation Superintendent (Traffic), Vijayawada[1957] 2 An. W.R. 233., that a petition under article 226 of the Constitution should be filed within a period of six months and the petitioner must explain satisfactorily the delay in approaching this court beyond that period. That applies to cases of refund as well. But as observed by the Supreme Court, that is a matter which has to be considered by the court having regard to the facts and circumstances of the particular case. Apart from the question of limitation, other considerations which may have to be taken into account and which are of like nature, may be, that the tax which was paid by the petitioner was not under a void law but only as a consequence of an interpretation of a valid law, which interpretation was subsequently found to be erroneous, the fact that the petitioner did not avail himself of the alternative remedies provided under the relevant statute and has allowed the assessment orders to become final and also the question whether or not he has any remedy under the genera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at a transaction, which is an outside sale (within the meaning of article 286 of the Constitution as it was in 1956), is not an outside sale and proceeds to levy sales tax on it, the decision of the appropriate authority cannot be said to be without jurisdiction." It may be that irrespective of whether the assessment orders are void or merely erroneous, the payment of such tax would still be one made under a mistake and, therefore, the petitioner may be entitled to refund under section 72 of the Act. But still that fact cannot be wholly excluded from consideration in order to determine whether the petitioner is entitled to the discretionary remedy under article 226 of the Constitution. If the assessment order is not void but is only erroneous in law, the assessee is obliged to get the assessment order set aside. Otherwise as laid down in State of Vindhya Pradesh v. Raghunath Mannulal[1952] 3 S.T.C. 256., "if the sales tax authority has jurisdiction, and has exercised it, may be wrongly, then the aggrieved party cannot go to the civil court, but should go to the Tribunal mentioned in the Sales Tax Statute itself. If, on the other hand, this authority had acted without jurisdiction, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid. But in cases where an order under which sales tax was levied was not void, but was made in exercise of its jurisdiction, even on an erroneous interpretation of law, which order was not challenged, or where the order made by the sales tax authority was in accordance with the view taken by the High Court of that State, no suit could be filed to set aside or modify or question the validity etc., of the assessment order and consequently, no writ of mandamus could be filed to recover money. For so long as the order of assessment stands, the amount paid cannot be said to be an amount paid under a "mistake of law". In that context it was also observed that even a delay of two years was a long delay disentitling the petitioner to refund of the tax. To sum up, in entitling the petitioners to refund of tax, the tax must have been collected by the State and paid by them under a mistake common to both the parties. But the petitioners would not be entitled to refund of tax as a matter of course merely because it has been paid under a mistake. The right to such refund is subject to questions of estoppel, waiver, limitation and the like. While for a suit for refund of money paid under a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds of the individual for retaining the sales tax illegally collected by him. Examining the petitioner's claim of refund having regard to the principles noted above we find that the petitioner in W.P. No. 1426 of 1967 allowed the assessment orders in respect of 1957-58 to 1960-61 to become final. He did not prefer any appeals either to the Appellate Assistant Commissioner or the Tribunal. Nor did he canvass the correctness of these assessments by moving this High Court by way of a tax revision case. The last of such assessment orders was made in 1962. In W.P. No. 1427 of 1967 the assessment orders as confirmed by the Assistant Commercial Tax Officer on appeal relating to the assessment years 1961-62 and 1962-63, which form the subject-matter of that writ petition, were likewise allowed to become final. The same is the case with regard to the assessment orders for the assessment years 1957-58 to 1964-65 which form the subject-matter of Writ Petition No. 3053 of 1967. The writ petitions were filed in 1967, i.e., in all cases after a period of six months and except in regard to the assessments for the assessment years 1963-64 and 1964-65 concerning W.P. No. 3053 of 1967, all were made ..... X X X X Extracts X X X X X X X X Extracts X X X X
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