9911796707
TMI Blog1983 (1) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment and appellate orders as well by way of an amendment application, which was allowed, and a prayer for quashing these orders was permitted to be added. Refund of tax paid under a mistake of law is now a fully established principle. As far back as 1958 it was held by the Supreme Court in STO v.Kanhaiya Lal Makund Lal Saraf [1958] 9 STC 747, that (p. 756): If one party under a mistake, whether of fact or law pays to another party money which is not due to by contract or otherwise, that money must be repaid. The mistake lies in thinking that the money paid was due when in fact it was not due and that mistake, if established, entitles the party paying the money to recover it back from the party receiving the same." Since then it ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, 1974, but while calculating the benefit the borrowed money and debt was deducted as provided in the rule to find out the capital employed. These orders became final, as, according to the petitioner, it was not aware at the time of making an assessment of the true and correct position of computation in law and was led to believe that the claim as allowed was legally correct. It has been averred that it became aware of the error in 1977 when it participated as intervener in Amar Dye Chemical Private Ltd v. ITO, a case fixed for hearing before a five-member Bench of a specially constituted Income-tax Appellate Tribunal, Bombay, which was decided on 1st December, 1977, and communicated to the petitioner in the last week of the month. During ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was under a mistake of law. Effect of declaration of the rule as invalid extended to the date of its enactment. In law, it shall be deemed to have been non-existent. Realising the futility of resistance on merits, the learned standing counsel for the Commissioner vehemently urged that the orders having been passed in the year 1973 and 1974, the petitioner was guilty of laches and this court should not exercise its extraordinary jurisdiction in favour of a person who was asleep and not watchful and diligent. We do not agree that the petitioner can be considered to be optimistically asleep, as was held in Raja Jagdambika Pratap Narain Singh v. CBDT [1975] 100 ITR 698, or it could pursue its remedy before Revenue authorities. In Dhulabhai v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at it was illegal, being based on a rule which was ultra vires. In Raja J.P.N. Singh's case [1975] 100 ITR 698 (SC), a distinction was drawn between exemptions claimed from taxation and levy being invalid. It was observed (p. 703): " Merely because an order has been passed by the officer and has not been appealed against, it does not become legal and final if otherwise it is void." And if this be so, as it is in this case, then the petitioner's only remedy was to approach this court. While examining the scope of the writ jurisdiction and the remedy under statute, it was observed in Raja J.P.N. singh's case [1975] 100 ITR 698, 704 (SC) : " The surviving issue of some moment is whether the writ jurisdiction is muzzled by statutory finality ..... X X X X Extracts X X X X X X X X Extracts X X X X
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