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TMI Blog1983 (4) TMI 237X X X X Extracts X X X X X X X X Extracts X X X X ..... t Commissioner by following a judgment of this Court in Shaw Wallace Co. Ltd. v. State of Andhra Pradesh (T.R.C. Nos. 27 and 28 of 1974) reported in [1976] 37 STC 448 which held that the assessing authorities could add such excise duty to the taxable turnover. The petitioner stated in his affidavit that he did not prefer any further appeal to the Tribunal as he was under a bona fide and mistaken impression that the tax was leviable by including the excise duty in the turnover and that the department was also labouring under the same mistake. Subsequently the petitioner came to know that the judgment of the High Court in Shaw Wallace Co. Ltd. v. State of Andhra Pradesh [1976] 37 STC 448 was overruled by the Supreme Court in the judgment in McDowell and Co. Ltd. v. Commercial Tax Officer [1977] 39 STC 151 (SC). The petitioner stated that the judgment of the Supreme Court was reported in the STC on 15th February, 1977, that he immediately approached his chartered accountant for necessary action, and applied for certified copies of the orders of assessment as well as the appellate order inasmuch as the original assessment order was filed in the appeal and the appellate order was mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsactions in silver bullion by the assessment order dated 31st May, 1949, 30th October, 1950, and 22nd August, 1951. Later, the levy on such transactions was held ultra vires by the High Court in another case by judgment dated 27th February, 1952, and confirmed by the Supreme Court on 3rd May, 1954. The respondent filed the writ petition in 1952. The State did not contend that the proper remedy was a suit or departmental appeal. The only contention was that the money paid under a mistake of law was irrecoverable. Though that was the law as applied in England, America and Australia, their Lordships observed that the Indian law was different. Bhagwati, j., accepting the view of the Privy Council in Shiba Prasad Singh's case AIR 1949 PC 297 held that section 72 of the Contract Act was applicable to cases where tax was paid under a mistake of law and further held that the money was recoverable subject to estoppel, waiver, limitation or the like. However it was held that no question of estoppel would arise when both the parties were labouring under a mistake of law. His Lordship added: "Merely because the State of U.P. had not retained the moneys paid by the respondent but had spent t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were exempt from tax under article 286(1)(a) of the Constitution of India as it then stood. Wanchoo, J. (as he then was), observed that there was no question of estoppel when the mistake of law was common to both the parties under section 72 of the Contract Act. Dealing with the question of limitation it was observed: "If refund is not made, remedy through court is open subject to the same restrictions and also to the period of limitation (see article 96 of the Limitation Act, 1908), namely, three years from the date when the mistake becomes known to the person who has made the payment by mistake." A finding was called for as to whether the writ petition was filed within three years of the date on which the mistake first became known to the respondent. Unlike Kanhaiya Lal's case [1958] 9 STC 747 (SC); AIR 1959 SC 135, in the last two cases the writ petitioner was not a third party who was trying to obtain refund under article 226 on the basis of an adjudication in some other case. There is an exhaustive discussion of the point by Mathew, j., in D. Cawasji Co. v. State of Mysore AIR 1975 SC 813. There the petitioners filed writ petitions in June and July, 1968, after the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not claim refund in that batch. Hence they were held precluded from claiming that relief by separate petitions on the ground that they could not be allowed to "split up their claim" for refund from the main relief. In the case of Raja Pratap Narain AIR 1975 SC 1816 the petitioner was paying tax on income from a mango grove from 1939-40 but his objections were overruled and every year assessments were likewise made. In 1963 the High Court held the income to be not taxable in relation to the 1939-40 year. The petitioner unsuccessfully applied to the department for refund for the years between 1940-41 to 1961-62 and moved the High Court under article 226 of the Constitution of India in September, 1968. Krishna Iyer, J., accepted the power of the High Court to (order) refund under article 226. His Lordship referred to the Privy Council case in Commissioner of Income-tax v. Tribune Trust AIR 1948 PC 102 where the Privy Council held that assessment made without giving an exemption which ought to have been given, was not a nullity. His Lordship distinguished the same as follows: "If the levy is illegal, the constitutional remedy goes into action. The Privy Council ruling does not cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osited into court, with a view to be paid to those customers who had paid to the dealers as in the Nawabganj Sugar Mills case AIR 1976 SC 1152. So far as our High Court is concerned, in Challa Appa Rao Co. v. Commercial Tax Officer, Narsapur [1970] 25 STC 256; ILR [1969] AP 418, the power under article 226 of the Constitution of India to direct refund on the ground of mistake of law was considered. In writ petitions filed by certain persons after the invalidity of the law was declared by the Supreme Court in another case, Jaganmohan Reddy, C.J., and Madhava Reddy, J. (as they then were), upheld the power not only in regard to cases where a particular taxing statute was held ultra vires but also where the assessment was "illegal " on account of an error apparent on the face of the record or where the statute was wrongly interpreted and no other interpretation was possible, provided the other assessees approached the High Court within reasonable time. In fact Bhailal's case [1964] 15 STC 450 (SC) clearly stated that refund could be ordered under article 226 in cases where it was collected in violation of a fundamental right or a statutory right. As to what is a reasonable time to a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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