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TMI Blog2020 (8) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... at that the respondent-assessee has collected the excess amount of CST from its buyer/receiver of the goods. In the facts of the present case, the respondent-assessee cannot be said to have collected the CST at the rate of 10% or 12% from its buyers/receiver of the goods in view of the contract of fixed price, there is no question of passing over the same to its buyer in view of the aforesaid decisions of the Apex Court in the case of MAFATLAL INDUSTRIES LTD. VERSUS UNION OF INDIA [ 1996 (12) TMI 50 - SUPREME COURT] - Even otherwise the provisions of the CST Act do not contemplate any power to forfeiture of refund by the Revenue. Thus, as held by the decision of the Supreme Court in the case of KHEMKA CO. (AGENCIES) PVT. LTD. VERSUS STATE OF MAHARASHTRA STATE OF MYSORE VERSUS GULDAS NARASAPPA THIMMAIAH OIL MILLS [ 1975 (2) TMI 91 - SUPREME COURT] , the provisions of Section 31 of the VAT Act enabling the Assessing Officer to forfeit the excess amount of tax deposited by the assessee cannot be applied to the provision of the CST Act. The Appeal deserves to be dismissed and re-framed questions of law are answered in favour of the assessee and against the Revenue - Appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances, the learned Tribunal has not erred in coming to a conclusion that the respondent was eligible for refund of excess collection of tax? 2. Whether under the facts and circumstances, the learned Tribunal has not erred in deleting the confirmation of forfeiture of excess collection of tax by the respondent? 6. In view of the above facts, issue Rule returnable forthwith in Special Civil Application No.8391 of 2019.Mr. Chintan Dave, the learned Assistant Government Pleader waives service of notice of rule for and on behalf of the respondents. 7. Since the Special Civil Application 8391 of 2019 is filed for issuance of directions to the respondents to pay the amount of refund arising out of the order dated 17.04.2017 passed in Second Appeal Nos.339 and 340 of 2016 passed by the Tribunal, it would therefore, be necessary to first consider the aforesaid substantial questions of law framed by this Court in Tax Appeal No.652 of 2017 filed by the Revenue under Section 78 of the Gujarat Value Tax Act, 2003 (hereinafter referred to as the GVAT Act, 2003 ) against the judgment and order dated 17.04.2017 passed by the Tribunal in Second Appeal Nos.339 and 340 of 2016. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. (vi) The petitioner being aggrieved by the order dated 31.03.2013 passed by the respondent No.2 preferred First Appeal before the Dy. Commissioner of Commercial Tax (Appeal)-V, Vadodara to dismiss the First Appeal vide order dated 04.03.2016. (vii) The petitioner being dissatisfied, preferred Second Appeal No. E/340/2016 before the Tribunal. The Tribunal allowed the Second Appeal Nos.339 and 340 of 2016 by order dated 17.04.2017. (viii) The Revenue i.e. respondent No.1State of Gujarat through the Commissioner of Commercial Tax, being aggrieved by the order passed by the Tribunal, preferred Tax Appeal No. 652 of 2017 before this Court, which is admitted as stated hereinabove. (ix) So far as the Tax Appeal No.339 of 2016 is concerned, the same is filed by the petitioner under the VAT Act, whereas the Second Appeal No. 340 of 2016 is filed under the CST Act. The Tribunal after considering the provisions of the CST Act and VAT Act has held as under : (17) We have considered rival submissions and facts of the case. We have also gone through the orders passed by the authorities below and the documents as well as case laws produced before this Tribunal. (18) So fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulation to find out the amount on which excise duty was to be calculated, taken into consideration the rate of 10% or 12.5% while preparing excise invoice as is seen from the sample invoices produced by the Government Representative today. Thus, the appellant s submission that excess payment to the tune of ₹ 1,81,49,641/- is a mistake made by the late tax consultant is not acceptable. We are supported in this view by our decision in Essar Services Limited (supra) wherein, in Para 13, it is observed that .. Though the appellant has denied that the appellant has made claim on the basis of decision of the Hon ble Apex Court in the case of 20th Century Finance Corporation (supra), the facts still remain that the appellant has paid the tax as per the returns and only at the assessment stage, the appellant has put forward its case with regard to the refund of the amount paid on the basis of the decision of the Hon ble Apex Court in the case of 20th Century Finance Corporation (supra). The appellant is therefore, not permitted to lodge its claim of refund on the basis of the decision of the Hon ble Apex Court in the case of 20th Century Finance Corporation (supra) and on that basi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed with simple imprisonment which may extend to six months, or with fine or with both; and when the offence is a continuing offence, with a daily fine which may extend to fifty rupees for every day during which the offence continues. Section 10 reads as under: (a) furnishes a declaration under sub-section (2) of section 6 or subsection (1) of section 6A or subsection (4) or sub-section (8) of section 8, which he knows, or has reason to believe, to be false; or (aa) fails to get himself registered as required by section 7, or fails to comply with an order under sub-section (3A) or with the requirements of sub-section (3C) or sub-section (3E), of that section; or (b) being a registered dealer, falsely represents when purchasing any class of goods that goods of such class are covered by his certificate of registration; or (c) not being a registered dealer, falsely represents when purchasing goods in the course of inter-State trade or commerce that he is a registered dealer; or (d) after purchasing any goods for any of the purposes specified in clause (b) or clause (c) or clause (d) of sub-section (3) or subsection (6) of section 8 fails, without reasonable excuse, to ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he department is to proceed for prosecution under section 10. Unlike the GVAT Act, the CST Act does not have provisions for forfeiture of the excess tax collected in contravention of the provisions under the CST Act. (27) Section 9 of the CST Act provides for levy and collection of tax and penalties. Section 9(2) provides that the State authorities empowered to assess, reassess, collect and enforce payment of tax under the general sales tax law of their State, shall on behalf of the Government of India, assess, reassess, collect and enforce payment of tax, including any interest or penalty payable by a dealer under the CST Act as if the tax or interest or penalty payable by such a dealer under the CST Act is a tax or interest or penalty payable under the general sales tax law of the State; and for this purpose provisions relating to, inter alia, penalties are applicable accordingly. (28) The Apex Court, in Khemka Co (supra) followed by the Bombay High Court in Ramkrishna Kulvantrai (supra) followed by this Tribunal in Asian Paints Industrial Coatings Limited (supra), has interpreted section 9(2) of the CST Act in following terms: Per Ray, C.J., and Khanna, J. Pena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the persons who are to be subjected to such a liability for the infringement of law are not left in a state of uncertainty as to what their duties or liabilities are. This is an essential requirement of a good government of laws. It is implied in the constitutional mandate found in article 265 of the Constitution. After considering the provisions of the Central Act as well as the State Acts relating to penalties, one is irresistibly driven to the conclusion that provisions relating to penalties are special and specific provisions in each Act. They are not part of the general sales tax law of either State or of the Union. Therefore, the reference to penalties in the concluding portion of section 9(2), preceding the proviso, must be interpreted to relate only to the special provisions relating to penalties provided for specifically in the Central Act. The intention to impose a charge upon the subject must be shown by clear and unambiguous language. If the language leaves room for coming to the conclusion that only penalties specified in the Central Act are enforceable by the machinery for enforcement of liability under the general sales tax law of a State, the legislative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority confirming the forfeiture of excess collection of tax under the CST Act contested in Second Appeal No.340 of 2016 is also set aside. The first appellate authority shall pass consequential orders in accordance with law under the GVAT Act and the CST Act preferably within three months from the date of receipt of the record of this appeal in his office. There is no order as to cost. Pronounced in open court on this 17th day of April, 2017. 9. Therefore, questions of law which arise for consideration are (i) whether the excess tax collected from the petitioner under the CST Act can be forfeited by the respondent authorities or the same is required to be refunded and (ii) whether the respondent-assessee is eligible for refund of central sales tax paid by it contrary to the provisions of Section 9A of the CST Act or whether the appellant-Revenue was entitled to forfeiture of the excess central sales tax deposited by the respondent-assessee. 10. In that view of the matter, the substantial questions of law are to be re-framed as under : (i) Whether in the facts and circumstances of the case, the Tribunal has erred in holding that the respondent was eligible for re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12.1 The learned AGP also placed reliance upon the following decisions in support of his contention, which were applied by the Appellate Authority to reject the appeal of the respondent-assessee : (i) State of Gujarat v. Ilac Limited, [1982] 50 STC 24 (Guj.), (ii) T. Stens and Co. Ltd. v. The State of Tamilnadu, [2005] 141 STC 21 (Mad), (iii) T. Stens and Co. Ltd. v The State of Tamilnadu, [2005] 141 STC 227 (SC), (iv) State of Tamilnadu vs. Kiran India Traders, (100 STC 131)(Mad) 12.2 Relying upon the aforesaid decisions, it was submitted that the Assessing Authority had rightly forfeited the excess amount of central sales tax deposited by the respondent-assessee. 12.3 It was therefore, submitted that the Tribunal has misinterpreted the provisions of the Central Sales Tax Act by holding that the Assessing Officer has no power to forfeit any amount collected in contravention of the provisions of Section 9A of the Central Sales Tax Act in view of the fact that no express provision in that behalf has been made in the Central Sale Tax Act, the Provision of State Sales Tax Act providing for such power of forfeiture or levy of penalty cannot be attrac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the CST Act and the assessee was therefore, required to calculate the CST payable on the basis of the reverse working. However, it was submitted that the respondent-assessee calculated the CST payable by reverse working by applying the rate of 10%/12.5% instead of correct rate of tax at 4%, which came into effect from 01.04.2007, which resulted into excess deposit of CST. 13.2It was submitted that the Tribunal applying the correct interpretation of Sections, 8A, 9,9A, 10, 10A of the CST Act has allowed the appeal filed by the respondent-assessee. 13.3 The learned advocate for the respondent-assessee relied upon the following decisions in support of his submissions: (i) In the case of M/s. Swadeshi Polytex Limited vs. Commissioner of Income Tax, U.P., Lucknow rendered by the Allahabad High Court reported in (2012) 50VST426(All). (ii) Decision of the Supreme Court in the case of Swadeshi Polytex Limited dismissing the Special Leave Petition vide order dated 04.07.2012 filed against judgment of the Allahabad High Court. (iii) Decision of the Supreme Court in the case of Khemka Co. (Agencies) Pvt. Ltd. v. State of Maharashtra reported in [1975] SC 1549, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... having gone through the materials on record and on perusal of the judgment of the Tribunal in order to appreciate the controversy raised in this appeal, it would be germane to refer to the relevant provisions of the Central Sales Tax Act: 8. Rates of tax on sales in the course of inter-State trade or commerce.- (1) Every dealer, who in the course of inter-State trade or commerce, sells to a registered dealer goods of the description referred to in sub-section (3), shall be liable to pay tax under this Act, which shall be three percent, of his turnover or at the rate applicable to the sale or purchase of such goods inside the appropriate State under the sales tax law of that State, whichever is lower: Provided that the Central Government may, by notification in the Official Gazette, reduce the rate of tax under this sub-section. (2) The tax payable by any dealer on his turnover in so far as the turnover or any part thereof relates to the sale of goods in the course of inter-State trade or commerce not falling within subsection (1), shall be at the rate applicable to the sale or purchase of such goods inside the appropriate State under the sales tax law of that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce, 3 [to a registered dealer 4 [***]] from any such place of business of any such goods or classes of goods as may be specified in the notification, or that the tax on such sales shall be calculated at such lower rates than those specified in subsection (1) [***] as may be mentioned in the notification; (b) that in respect of all sales of goods or sales of such classes of goods as may be specified in the notification, which are made, in the course of inter-State trade or commerce 6 [to a registered dealer [***]] by any dealer having his place of business in the State or by any class of such dealers as may be specified in the notification to any person or to such class of persons as may be specified in the notification, no tax under this Act shall be payable or the tax on such sales shall be calculated at such lower rates than those specified in subsection (1) [***] as may be mentioned in the notification.] (6) Notwithstanding anything contained in this section, no tax under this Act shall be payable by any dealer in respect of sale of any goods made by such dealer, in the course of interState trade or commerce to a registered dealer for the purpose of setting up, operati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... day of May, 1966; (ii) within a period of six months from the date of delivery of the goods, in the case of goods returned on or after the 14th day of May, 1966: Provided that satisfactory evidence of such return of goods and of refund or adjustment in accounts of the sale price thereof is produced before the authority competent to assess or, as the case may be, reassess the tax payable by the dealer under this Act; and (c) such other deductions as the Central Government may, having regard to the prevalent market conditions, facility of trade and interests of consumers, prescribe. (2) Save as otherwise provided in subsection (1), in determining the turnover of a dealer for the purposes of this Act, no deduction shall be made from the aggregate of the sale prices.] 9. Levy and collection of tax and penalties.- (1) The tax payable by any dealer under this Act on sales of goods effected by him in the course of inter-State trade or commerce, whether such sales fall within clause (a) or clause (b) of section 3, shall be levied by the Government of India and the tax so levied shall be collected by that Government in accordance with the provision of sub-sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in this subsection. (2A) All the provisions relating to offences, interest and penalties (including provisions relating to penalties in lieu of prosecution for an offence or in addition to the penalties or punishment for an offence but excluding the provisions relating to matters provided for in section 10 and 10A) of the general sales tax law of each State shall, with necessary modifications, apply in relation to the assessment, re-assessment, collection and the enforcement of payment of any tax required to be collected under this Act in such State or in relation to any process connected with such assessment, re-assessment, collection or enforcement of payment as if the tax under this Act were a tax under such sales tax law. (2B) If the tax payable by any dealer under this Act is not paid in time, the dealer shall be liable to pay interest for delayed payment of such tax and all the provisions for delayed payment of such tax and all the provisions relating to due date for payment of tax, rate of interest for delayed payment of tax, of the general sales tax law of each State, shall apply in relation to due date for payment of tax, rate of interest for delayed payment of tax, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hable with simple imprisonment which may extend to six months, or with fine or with both; and when the offence is a continuing offence, with a daily fine which may extend to fifty rupees for every day during which the offence continues. 10A. Imposition of penalty in lieu of prosecution- (1)] If any person purchasing goods is guilty of an offence under clause (b) or clause (c) or clause (d) of section 10, the authority who granted to him or, as the case may be, is competent to grant to him a certificate of registration under this Act may, after giving him a reasonable opportunity of being heard, by order in writing, impose upon him by way of penalty a sum not exceeding one and a half times 7 [the tax which would have been levied under sub-section (2) of section 8 in respect of the sale to him of the goods, if the sale had been a sale falling within that subsection: Provided that no prosecution for an offence under section 10 shall be instituted in respect of the same facts on which a penalty has been imposed under this section. (2) The penalty imposed upon any dealer under sub-section (1) shall be collected by the Government of India in the manner provided in sub-se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecovered by utilising the provisions of the general sales tax laws of the respective States. This argument is based upon the language of subsection (2A) of section 9 of the Act which is extracted above. It is contended that the words (A) 11 the provisions relating to offences and penalties.. of the general sales tax law of each State shall with necessary modifications apply in relation to the assessment, re-assessment, collection and the enforcement of payment of any tax required to be collected under this Act . ... are insufficient to make the provisions relating to penalties in the State laws applicable to the assessees under the Act as the word 'penalties' is not found alongwith the words assessment, reassessment, collection and the enforcement of payment of any tax'. The argument is misconceived. The principal object of the Act is not the levying of penalties. Its object is assessment, reassessment, collection and the enforcement of payment of central sales tax. The assessment incur the liability to pay penalties on account of certain acts or omissions committed by them at the various stages specified above, namely, assessment, reassessment, collection and the enf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view of the retrospective amendment, the basis of the judgment in Kheamka's case (supra) was also removed. Consequently the judgment delivered in that case could not stand in the way of realisation of penalties in accordance with the validating provisions of section 9 (2) of the Amending Act We are of the view that sub-section (2-A) of section 9 of the Act and section 9 of the Amending Act are adequate enough to assess and realise penalties with effect from January 5, 1957 as contemplated therein. We, therefore, hold that there is no substance in this contention of the petitioners. 18. The second point urged on behalf of the petitioners is that sub-section (2A) of section 9 of the Act suffers from the vice of excessive delegation of legislative power. It is argued that Parliament by adopting the provisions relating to offences and penalties referred to in the various general sales tax laws of the States has abdicated its essential legislative function. The question whether there has been excessive delegation or abdication of legislative power has to be decided on the meaning of the words in the statute and the policy behind it. In the instant case, Parliament has not autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nover. Under sub-section (2) of section 8 the tax payable on the turnover relating to inter- State sales not falling under sub-section (1) of section 8 was (a) in the case of declared goods, to be computed at the rate applicable to the sale or purchase of such goods inside the appropriate State and (b) in the case of goods other than declared goods at the rate of seven per cent or at the rate applicable to the sale or purchase of such goods inside the appropriate State whichever was higher. Sub-section (2-A) Of section 8 of the Act provided that notwithstanding anything contained in subsection (1) or sub-section (2), if under the sales tax law of the appropriate State the sale or purchase, as the case may be, of any goods by a dealer was exempt from tax generally or subject to tax generally at a rate which was lower than one per cent (whether called a tax, a fee or by any other name) the tax payable under the Act on his turnover in so far as the turnover or any part thereof related to the sale of such goods should be nil or as the case might be, should be calculated at the lower rate. The Explanation to subsection 2-A of section 8 provided that for the purpose of that sub-section, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clear that the legislature has contemplated that elasticity of rates consistent with economic forces may be maintained. Prevalence of differential rates of tax on sales of the same commodity cannot be regarded in isolation as determinative of the object to discriminate between one State and another. Under the Constitution as originally framed, revenue from sales tax was reserved to the States. But since the power of taxation could be exercised in a manner prejudicial to the larger public interests by the States it was found necessary to restrict the power of taxation in respect of transactions which had an interState content. Amendment of Art. 286 and the enactment of the Sales Tax Validation Act 1956, and the Central Sales Tax Act, 1956, were all intended to serve a dual purpose: to maintain the source of revenue from sales tax to the States and at the same time to prevent the States from subjecting transactions in the course of inter-State trade so as to obstruct the free flow of trade by making commodities unduly expensive. The effect of the Constitutional provisions achieved in a somewhat devious manner is still clear, viz. to reserve sales tax as a source of revenue for the St ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dealer under the Act. 14.5 The Allahabad High Court in the case of Swadeshi Polytex Limited (supra) has held as under: 7. I find substance in the argument of learned counsel for the applicant. Section 8-A (1) of the Central Act provides determination of the turnover for the purpose of the Act. By permitting a deduction from the aggregate of the sale price as per formula given therein. It appears that intent of this formula is that in case if sale consideration includes the amount of tax, the same may be excluded while arriving to the net turnover for the levy of tax so that there should not be a tax on tax. According to the applicant the tax has been paid @ 2.5% on the net turnover arrived on the basis of the said formula. The proviso to section 8-A (1) of the Central Act is not applicable in the present case as there is no evidence that any tax by way of any amount has been deposited by the registered dealer in accordance to the provisions of this Act. There is no evidence on record that the tax has been realised by the applicant in the bills from the customers. The report has been sought in this regard by the first appellate authority from the assessing authority. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accordance to Section 29 of the Act along with the interest in accordance to law. 14.6 The aforesaid decision of the Allahabad High Court was confirmed by Supreme Court by dismissing the Special Leave Petition vide order dated 04.07.2012. 14.7 The Supreme Court in the case of India Carbon Ltd. and Ors. Vs. State of Assam held has held as under : 10. The words charging or payment of interest in sub- section (2) and sub-section (2A) of the Section 9, were introduced with retrospective effect in 1976. Section 9(2A) reads thus: All the provisions relating to offences and penalties (including provisions relating to penalties in lieu of prosecution for an offence or in addition to the penalties or punishment for an offence but excluding the provisions relating to matters provided for in Section 10 and 10A) of the general sales tax law of each State shall, with necessary modifications, apply in relation to the assessment, re- assessment, collection and the enforcement of payment of any tax required to be collected under this Act in such State or in relation to any process connected with such assessment, re-assessment, collection or enforcement of payment as if th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the provisions of Sections 37, 39, 46 and 61 of the Bombay Sales Tax Act, 1959 and Section 9A of the CST Act has held as under : 4. Under clause (f) of section 10 of the Central Sales Tax Act, 1956, any person collecting any amount by way of tax in contravention of the provisions contained in section 9A of the said Act commits an offence and is liable to simple imprisonment which may extend to six months, or to payment of fine, or both. So far as the power of forfeiture under the Central Sales Tax Act, 1956, is concerned, in Khemka Co. (Agencies) Pvt. Ltd. v. State of Maharashtra, the Supreme Court has held that the assessing authorities under the Central Sales Tax Act , 1956, have no power to forfeit any amount collected in contravention of the provisions of section 9A of the said Act or to impose any penalty in respect thereof in view of the fact that no express provisions in that behalf have been made in the Central Sales Tax Act, 1956, and the provisions of a State Sales Tax Act providing for such power of forfeiture or levy of penalty are not attracted to such a case. 5. The four questions which the petitioner by his application initially wanted this court to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was further submitted on behalf of the petitioner that though in view of the above Supreme Court decision it was not open to the department either to forfeit the amount which according to the department was collected by way of sales tax on these transactions or to levy a penalty on the respondents in respect thereof, it was open to the State to prosecute the respondents in respect thereof and that though they may not in this particular case prosecute the respondents, they wanted this question to be decided, and decided in favour of the petitioner, to enable the State to prosecute other dealers as and when they collected amounts in respect of transactions which are not sales, and which collection according to the department amounted to collection of sales tax. It is not possible to accept these contentions. On none of the point can the Tribunal's judgment be said to be academic or on any point not arising before it. The Tribunal has decided in favour of the respondents on two grounds : The first is that admittedly these transactions of the aggregate value of ₹ 99,640 not being sales, there could be no question of the respondents having collected any sales tax on it and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so. 14.9 In view of the above decisions, the question arises whether the decision of the Constitutional bench of the Supreme Court in the case of Mafatlal Industries Ltd. v Union of India and Ors. reported in (1997) 5 SCC 536 would be applicable to the provisions of CST Act so as to forfeit the excess amount of CST deposited by the respondent-assessee on the ground of unjust enrichment. The Apex Court in view of the provisions of the Central Excise Act, 1944, has held that the claim for refund would be classified and fall into three groups or categories: (i) Unconstitutional levy i.e. where the claim is founded on the ground that the tax was levied under the unconstitutional provision. (ii) Legal levy where the claim of for refund is based on the ground that there has been misrepresentation / misapplication /erroneous interpretation of the Excise Act / Rules or notification or erroneous finding of fact or in violation of fundamentals principles of judicial procedure. (iii) Mistake of law where the claim for refund is based on the decision rendered in another case holding levy is not excisable in law or without jurisdiction or illegal or unconstitutional. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd refund of duties imposed thereunder. Section 11-B of the Central Excises and Salt Act and Section 27 of the Customs Act, both before and after the 1991 (Amendment) Act are constitutionally valid and have to be followed and given effect to. Section 72 of the Contract Act has no application to such a claim of refund and cannot form a basis for maintaining a suit or a writ petition. All refund claims except those mentioned under Proposition (ii) below have to be and must be filed and adjudicated under the provisions of the Central Excises and Salt Act or the Customs Act, as the case may be. It is necessary to emphasise in this behalf that Act provides a complete mechanism for correcting any errors whether of fact or law and that not only an appeal is provided to a Tribunal - which is not a departmental organ - but to this Court, which is a civil court. (ii) Where, however, a refund is claimed on the ground that the provision of the Act under which it was levied is or has been held to be unconstitutional, such a claim, being a claim outside the purview of the enactment, can be made either by way of a suit or by way of a writ petition. This principle is, however, subject to an e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re it is not possible to refund the amount to him for one or the other reason, it is just and appropriate that that amount is retained by the State, i.e., by the people. There is no immorality or impropriety involved in such a proposition. The doctrine of unjust enrichment is a just and salutary doctrine. No person can seek to collect the duty from both ends. In other words, he cannot collect the duty from his purchaser at one end and also collect the same duty from the State on the ground that it has been collected from him contrary to law. The power of the Court is not meant to be exercised for unjustly enriching a person. The doctrine of unjust enrichment is, however, inapplicable to the State. State represents the people of the country. No one can speak of the people being unjustly enriched. (iv) It is not open to any person to make a refund claim on the basis of a decision of a court or tribunal rendered in the case of another person. He cannot also claim that the decision of the court/tribunal in another person's case has led him to discover the mistake of law under which he has paid the tax nor can he claim that he is entitled to prefer a writ petition or to in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions in Kanhaiya Lal have also been wrongly decided to the above extent. This declaration - or the law laid down in Propositions (i) to (vii) above - shall not however entitle the State to recover the taxes/duties already refunded and in respect whereof no proceedings are pending before any authority/Tribunal or Court as on this date. All pending matters shall, however, be governed by the law declared herein notwithstanding that the tax or duty has been refunded pending those proceedings, whether under the orders of an authority, Tribunal or Court or otherwise. (ix) The amendments made and the provisions inserted by the Central Excises and Customs Law (Amendment) Act, 1991 in the Central Excises and Salt Act and the Customs Act are constitutionally valid and are unexceptionable. (x) By virtue of sub-section (3) to Section 11-B of the Central Excises and Salt Act, as amended by the aforesaid Amendment Act, and by virtue of the provisions contained in sub-section (3) of Section 27 of the Customs Act, 1962, as amended by the said Amendment Act, all claims for refund (excepting those which arise as a result of declaration of unconstitutionality of a provision whereunder the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d price, there is no question of passing over the same to its buyer in view of the aforesaid decisions of the Apex Court in the case of Mafatlal Industries (supra). Even otherwise the provisions of the CST Act do not contemplate any power to forfeiture of refund by the Revenue. 14.12 In such circumstances as held by the decision of the Supreme Court in the case of Khemka Co (supra), the provisions of Section 31 of the VAT Act enabling the Assessing Officer to forfeit the excess amount of tax deposited by the assessee cannot be applied to the provision of the CST Act. 14.13 Reliance placed on the decisions by the Revenue are also not applicable in the facts of the case in as much as such the same are based on the decision of the Apex Court in the case of Mafatlal Industries (supra) and in view of the facts of the case as observed herein above, in the absence of any power with the Revenue to forfeit such excess tax, the respondent assessee is entitled to refund of the same. 15. For the foregoing reasons, the Appeal deserves to be dismissed and re-framed questions of law are answered in favour of the assessee and against the Revenue. The appeal fails and is accordingly ..... X X X X Extracts X X X X X X X X Extracts X X X X
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