COMMISSIONER OF SALES TAX, U.P. versus AURIAYA CHAMBER OF COMMERCE, ALLAHABAD

Citation: [1986] 2 S.C.R. 430 · Decided: 10-04-1986 · Supreme Court of India · Bench: SABYASACHI MUKHERJI · Disposal: Dismissed

Cited by 3 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
B 
c 
430 
<XHUSSIONER <W SALES TAX. U.P. 
v. 
AJIRTAYA CllAHllER <W ClHIERCE, AIJAHABAD. 
APRIL 10, 1986 
[SABYASACHI MUKHARJI AND K.N. SINGH, JJ.] 
Uttar Pradesh Sales Tax Act, 1948, s. 2(h), 7-F and 29 -
Sales Tax -
Refund of -
Tax paid under provision of law 
subsequently held unconstitutional -
Liability of State to 
refund tax - Limitation period for claiming such refund. 
Indian Contract Act 1872, s. 72 -
Money paid 
mistake of law - Liability to return/refund. 
under t 
-t-
The proviso to s. 29 of the U.P. Sales Tax Act 1948 
provides thst no claim to the refund of any tax or other 
D 
amount paid under the Act shsll be allowed unless it was made 
within 24 months from the date on which the order for 
assessment was passed or within 12 months of the final order 
passed in appeal, revision or reference in respect of the 
E 
F 
G 
H 
order of assessment whichever period is later. 
.+ 
The respondent-assessee had been taxed on the basis of 
sale of forward contracts for the assessment year 1949-50 and 
for subsequent years. After coming to know of the decision of 
the Supreme Court in Sal.es Tall Officer, Pilibhit v. M/s. Budh 
Prakaah Jai Prakash, [1955] l S.C.R. 243 that the provision 
~ 
for taxation of sales tax on forward contract was ultra vires, 
the respondent-assessee filed a Revision in 1955 for quashing f 
the !lSSessment order for the relevant year 1955 i.e. within a 
year of the assessment order. The revision was dismissed in 
September 1958 on the ground that it had been filed after a 
long delay and was barred by limitation. The assessee there-
after made a formal application before the Sales Tax Officer 
for refund of the amounts which were deposited in accordance 
with various assessment orders under mistake. The Sales Tax 
Officer dismissed that application as barred by period of )' 
limitation prescribed under Article 96 of the First Schedule 
of the Indian Limitation Act 1908. The assessee then filed a 
revision to the court of Additional Judge (Revision) Sales 
Tax, u. p, against the order of the Sales Tax Officer. Relying 
.. 
c.s.T. v. CHAMBER OF COMMERCE 
431 
~ upon the decision of the Allahabad High C'.ourt in Sales 1-
C_,_i ssiooer, U.P. v. Sada Sukh Veopar llandal, 
1959 S.T.C. 
57, the Additional Judge (Revision) held that there was no 
period of limitation and ordered refund of sales tax of 
Rs.3535.3 for 1948-49, Rs.9,205.12 for 1949-50, Rs.3,653.8 for 
1950-51 and Rs.5,014.3.3 for 1951-52. The High Court also 
upheld the order of the Additional Judge (Revision) in a 
+ reference at the instance of the revenue. It held: 
(a) that 
the period of limitation under Article 96 of the Limitation 
Act could not be taken into consideration by the Sales Tax 
Authorities in refusing to allow refund; and (b) that the 
Additional Judge 
(Revisions) Sales Tax, 
U.P. was legally 
justified in entertaining the revision application after the 
'-J lapse of several years from the date of the assessment order 
-+ and that the sums deposited by respondent-company towards 
sales tax for the year 1949-50 and onwards were refundable to 
the company. 
A 
B 
c 
Dismissing the appeal of the appellant-revenue, this 
D 
Court, 
HEU>: 
1. (i) Article 265 
of the Constitution enjoins 
f- that no tax shall be levied or collected except by authority 
of law. Therefore, when moneys are paid to the State which the 
State has no legal right to receive, it is ordinarily the duty 
of the State subject to any special provisions of any 
particular statute or special facts and circumstances of the 
~ case, to refund the tax of the amount paid. [437 ~] 
l.(ii) Where indubitably there is in the dealer legal 
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..., title to get the money refunded and where the dealer is not 
F 
\ guilty of 
any 
latches 
and where 
there is no 
specific 
prohibition against refund, one should not get entangled in 
the cobweb of procedures but do substantial justice. [445 F-G] 
Suresh a.andra Bose v. State of West Bengal, 
38 s.T.c. 
99 
and State of West Bengal and Ors. v. Suresh Chandra Bose, 
G 
45 s.T.c. 
118, approved. 
2.(i) The rights and the obligations of the parties DJ.lSt 
be found within the four corners of the Act and the Supreme 
Court in an appeal under an Act lll.lSt act under the four 
corners of law, but in interpreting the relevant procedural 
H 
provisions, fairness and justice should be the approach and 
A 
B 
c 
D 
E 
F 
G 
H 
432 
SUPREME COURT REPORTS 
(1986] 2 s.c.R. 
even in a fiscal statute, equity should prev

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