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TMI Blog1999 (2) TMI 650X X X X Extracts X X X X X X X X Extracts X X X X ..... the Madras High Court rendered a decision on February 11, 1985 in State of Tamil Nadu v. East Coast Constructions and Industries [1986] 61 STC 337, that the purchase of such construction materials and used in the construction of a building, will not attract purchase tax under section 7-A(1) of the Tamil Nadu General Sales Tax Act. The petitioners became aware of the said decision only on May 12, 1986 when the case was reported in journals in [1986] 61 STC 337 (Mad.). The petitioners immediately filed an application on May 12, 1986 before the Deputy Commissioner (CT), Coimbatore, seeking orders of refund by invoking section 32 of the Tamil Nadu General Sales Tax Act, 1959. The Deputy Commissioner held that the levy of tax for the said three assessment years had become final since the petitioner did not file any statutory appeal. The Deputy Commissioner further expressed his inability to set aside the assessment because section 32 had been amended with effect from November 1, 1982 and he could exercise power only if the order of the assessing authority was prejudicial to the interest of the revenue. The order of the Deputy Commissioner is dated June 19, 1986. The petitioner thereupon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anufacture of other goods". This judgment of the division Bench has become final. 6.. The only question for decision is whether the petitioner has been guilty of laches in approaching the court for refund. The principles of refund in such matters have been elaborately discussed by the Supreme Court of India in [1998] 111 STC 467 (Mafatlal Industries Ltd. v. Union of India). The Supreme Court was examining the validity of the amended provisions of the Central Excises and Salt Act, 1944 and the fixation of the period of limitation. No doubt, in the Tamil Nadu General Sales Tax Act, there are no such provisions fixing the period of limitation for claiming refund. All the same the general principles relating to the claims for refund as enunciated by the apex Court has to be understood and followed. The apex Court classified into 3 broad categories, all claims of refund: (1) Claim for refund on the basis that the provision of law was unconstitutional. (2) Claims for refund based on the ground that there was mis-application of law. (3) Claims for refund enunciated on the basis of a decision rendered in a third party case. 7.. On the general principle, vis-a-vis a statutory prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct Board, Bhojpur): In this case certain demands under the Bengal Cess Act, 1880 from the party based on a judgment of the Calcutta High Court reported in the year 1979 in a journal, the party filed writ petitions under article 226 of the Constitution of India before the Patna High Court for quashing the demand against him right from the year 1953-54 to 1966-67. The High Court by judgment dated January 6, 1981 dismissed the writ petition. For the subsequent years 1967-68, 1971-72, the High Court allowed the writ petitions and quashed the demand notices. While considering the question in respect of the earlier demands, the Supreme Court observed as follows: "The question, therefore, arising in these appeals is whether the appellant is entitled to the same relief in respect of the demands for the earlier years. Since the demands for the earlier years were the subject-matter of the challenge in the suit which was pending, the company had not sought relief of quashing the said demands in the writ petition filed earlier. The challenge in the suit as stated was only on the basis of the agreement and not on the ground of illegality. The company did not include the demands for the earlie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bserved as follows: ".....In a case where payment has been made under a mistake of law as contrasted with a mistake of fact, generally the mistake becomes known to the party only when a court makes a declaration as to the invalidity of the law. Though a party could, with reasonable diligence, discover a mistake of fact even before a court makes a pronouncement, it is seldom that a person can, even with reasonable diligence, discover a mistake of law before a judgment adjudging the validity of the law." 12.. It is interesting to note that in that case also the plaintiff came to court after coming to know of the judgment in another case laying down the correct position in law. 13.. We will now take up the decisions which deal directly with the question of limitation and laches. We are concerned with the question of limitation because in this case it is pointed out that though the judgment in [1986] in 61 STC 337 (Mad.) (State of Tamil Nadu v. East Coast Constructions and Industries) was rendered on February 11, 1985, the writ petitions seems to be filed in the year 1988. The explanation is that the judgment was reported only later in or about May, 1986. Immediately, the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given a notice to the petitioner. I accordingly overrule the second contention of the learned Additional Advocate-General also." 15.. It was observed that the rule of laches or delay is not a rigid rule and unless there are third party rights created, the court can always exercise the discretion in granting relief. Similarly, in [1985] 153 ITR 721 (Ker); 1984 Tax LR 514 (T.A. George v. Agricultural Income-tax Officer) the Kerala High Court observed as follows: "There is no period of limitation prescribed for invoking the jurisdiction of this Court under article 226 of the Constitution. But all the same the persons interested in seeking relief must act within a reasonable time or period. In case where the order or decision under attack affects the very jurisdiction or is found to be one without jurisdiction or passed in excess of jurisdiction, the delay in filing the application is of no serious consequence. The delay in a particular case has to be decided on the facts and circumstances of the case. The power to grant relief under article 226 of the Constitution is a discretionary power." Reported as Builders Association of India v. State of Bihar [1992] 85 STC 362. 16.. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... similar relief could be rejected on the ground of laches. Those propositions of law cannot be disputed, but the judgment will depend upon the facts of each case. In [1982] 51 STC 310 (Cal) (Union of India v. Commercial Tax Officer, Shyambazar Charge), all that was laid down was that even if an assessment was void and payment was made through a mistake, the court was not bound to order repayment and that the exercise of discretion would depend upon the facts of each case. A decision in AIR 1987 SC 251 (State of M.P. v. Nandlal Jaiswal) explains clearly the circumstances under which an objection can be dismissed on the ground of laches. Observed the Supreme Court: "The High Court does not ordinarily permit a belated resort to the extraordinary remedy under the writ jurisdiction because it is likely to cause confusion and public inconvenience and bring in its train new injustices. The rights of third parties may intervene and if the writ jurisdiction is exercised on a writ petition filed after unreasonable delay, it may have the effect of inflicting not only hardship and inconvenience but also injustice on third parties. When the writ jurisdiction of the High Court is invoked, un ..... X X X X Extracts X X X X X X X X Extracts X X X X
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