MINERVA MILLS LTD Vs. STATE OF MYSORE AND

JUDGEMENT

(1.) Civil Petition No. 111 of 1954 and Writ Petition No. 39 of 1954 are two connected cases in which the same point of law is involved and will, therefore, be covered by a single order. The petitioner in the former is the Minerva Mills Ltd., Bangalore, and in the latter, the Mysore Spinning and Manufacturing Company Ltd.

(2.) Civil Petition No. 111 of 1954 relates to a sum of Rs. 130-15-5 collected by the petitioner-company as contingency deposit for sale of cotton dust and refuse for the quarter ending December, 1951. It was contended by the petitioner that the cotton dust and refuse were exempt from taxation under Section 5 of the Mysore Sales Tax Act. The Sales Tax Authorities, disagreeing with that contention, insisted on collection of tax on these items also. As the point was not free from doubt, the petitioner mills, by way of abundant caution, collected tax on these items from their constituents and paid the same to the Sales Tax Department. Later the Sales Tax Department held that the goods referred to above were exempt from tax and thereafter the petitioner mills applied for refund of the amount paid to the Sales Tax Department. The Department contended that once the amount was collected by the mills, they had to pay the same to the Department under Section 11 (2) of the Sales Tax Act and that, therefore, the Department was not liable to refund the amount. At the request of the petitioner-mills the point has been referred to this Court under Section 16 of the Mysore Sales Tax Act.

(3.) In Writ Petition No. 39 of 1954 the petitioner-company collected certain amounts as inter-State sales tax for some period, and as tax contingency deposit for some other period. It has subsequently been held that tax on these items is exempt under the provisions of Article 286(1)(a) of the Constitution of India; but what the Department contends is that since the petitioner-company have collected the taxes, they were bound to pay the same to the Department under Section 11 (2) of the Mysore Sales Tax Act. We are of opinion that the petitioners in both these cases have to succeed.