LexSALES TAX OFFICER, BANARAS & OTHERS versus KANHAIYA LAL MUKUNDLAL SARAF
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• • • • • • 1350 ~UPREME COURT REPORTS [1959] SALES TAX OFFICER, BAXARAB.& OTHERS • • • v . KANHAIY A LAL 111UKUNDLAL SARAF (S. R. DAs C. J., BHAGWATI, B. P. SnrnA, SuI:DA HAo. ' and K. N. W ANCHOO JJ.) ' Mistake of Law-Paymc11t-Sales tax on forttard transactio11s, wbseq11cutly loeld i11valid·-Claim for ref11nd-Vol11nfary paymcnt- Equitable considcraiio11s-Indim1 Contract Act, 1872 (9 of 1872), s. 72. Under s. 72 of the Indian Contract Act, 1872: "A person to whom money has been paid ... by mistake or under coercion must repay or return it". The respondent, a registered firm, paid sales tax : n respect of its forward transactions in pursuance of the assessment ordell6 passed by the sales tax officer for the years 1949-51, bllt in 1952, the Allahabad High Court having held in Messrs. B11dh Pr.1kash jai I'rakash v. Sales Tax Officer, Kanpur, 1952 A. L. J 332, that the levy of sales tax on for\\'ard transactions was ultra vircs, the respondent applied for a refund of the amounts :;iaid, by a writ petition under Art. 226 of the Constitution. It was con;, tended for the sales tax authorities that the respondent was not entitled to a refund because (I) the amounts in disputc were paid by the respondent under a mistake of law and were ~herefore irrecoverable, (2) the payments. were in discharge of the liabili(¥ under the Sales Tax Act and were 1•oluntary payments without protest, and (3) inasmuch as the monies which had be"n received by the Govern1'1ent had not been retained but had been spent away by it, the respondent was disentitled to reCO\'•or the said amounts. Held, that the term "mistake" ins. 72 of the Indian Con- tract Act comprises within its scope a mistake of law as well as a mistake of fact and that, under that section a party.;s entitled to recover money paid by mistake or under coercion, and if it is csta~lished that the payment, even though it he o1 a t~x. has been made by the party labouring un<lr.r a mistake of Jaw, the party receiving the money is hound to repay or return it though it rr.ight have been paid voluntarily, subject, ho\\'ever, to ques- tions of estoppel, waiver. limitation or the like. Shib Prlllad Singlo v. Maloaraja Srish Chandra /\'andi, (1949) L. I<. 76 I.A. 244, relied on. • \\'here there is a clear and unanlbiguous prov,sion of law which entitles a parry to the relief claimed by him, equitable considerations•cannol be imported and, in the instant case, the fact that tile Covernmcnt had not retained the moni~s paid by 'the respondent but had spent them away in (he ordnary course • • . ' • .. -, J • • • -, - • • • • S.C.R. SUPREME COURT REPORTS" 1351 of business of the 0 Sfate would not make any difference, and t958 under the plain terms of s. 72 o.f t!Te Act the respondent was entitled to recover the amounts. Sal" Tax Offio<Y Observations in Nagorao v. Governor-General in Council, Mukun;ial Saraf A. I. R. r95r Nag. 372, 374, to the effect that where a party receiving money paid under a mistake has no longer the ;noney with him, equitable considerations might arise, disapproved. CIVIL APPELLATE J URISDIOTION : Civil Appeal No. 87 of 1957. Appeal from the judgment and decree dated December l, 1955, of the Allahabad High Court in Special Appeal No. 18 of 1955, arising out of the judg- ment and order dated November 30, 1954, of the said Court in Civil Misc. Writ No. 355 of 1952. 'H. N. Sanyal, Additional Solicitor-General of India, G. G. ~Mathur and 0. P. Lal, for the appellants. P. R. Das and B. P. JJfaheshwari, for the respon- dent . • B. P. Malteshwari, for Agra :Bullion Exchange • (Intervener). K. Vetl'aswami and T. M. Sen, for the State of ll'l<tdras (Intervener). • R. G. Prasad, for the State of Bihar (Intervener). H. N. Sanyal, Additional Solicitor-Generctl, of India, R. Gopalakrishnan and T. M. Sen, for the Union of India (Intervener). 1958. September 23. The Judgment of the Court was deliv~red by BHAGWATI J.-The facts leading up to this app<!al lie witliin a narrow compass. The respondent is a firm registered under the Indian Partnership Act deal- ing in Bullion, Gold and Silver ornaments and forward contracts in Silver Bullion at Banaras in the State of Uttar Pradesh. For the assessment years 1948-49, 1949-5!'.l and 1950-51 the Sales Tax Officer, Banaras, the appellant No. 1 herein assessed the respondent to U. P. Sales Tax on its forward trans11.cti0Rs in Sil v.er Bullion. The
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