MOHAMMED ISMAIL RAWTHER Vs. STO ADOOR

JUDGEMENT

(1.) The petitioner seeks by this proceeding to quash Exts. P 1 to P 5, the orders assessing the petitioner to sales tax in respect of his turnover as dealer in hill produce for the years 1959-60 to 1962-63 and 1965-66 and for refund of the tax already collected thereunder. Under the schedule to the General Sales Tax Act, 1125, the turnover of hill produce is taxable only at the last purchase point within the State. The assessments here are under the Central Sales Tax Act and S.9(1) of the Central Sales Tax Act provides:-

(2.) In State of Mysore v. Lakshminarasimhiah 16 STC 231 it was held after referring to the relevant sections of that Act:

(3.) What is contended for on behalf of the respondents is that no application under Art.226 of the Constitution for a writ of mandamus for refund of the tax already collected under these orders would lie. In support of this contention, reliance was placed on the ruling in Suganmal v. State of Madhya Pradesh 1965 (56) ITR 84 . In that case, the Indore Industrial Tax Act, 1957, imposed industrial tax on cotton mills. The appellant before the Supreme Court was the managing proprietor of the Bhandari Iron and Steel company, which carried on the business of mechanical engineers, founders and rerollers. Although the Bhanderi Iron & Steel Co. did not run any cotton mill, it submitted returns and deposited industrial tax to the tune of Rs. 1,75722.5.2, Final assessments for the different years were made in 1951 and 1952. Appeals were filed against the assessment orders, and in June 1965, the appellate authority held that the Bhandari Iron and Steel Co, was not liable to pay industrial tax as it did not carry on any business which was liable to be assessed to tax and quashed the various assessment orders. No direction was however given by the appellate authority for the refund of tax which had been realised. After appropriating Rs. 37, 951.7.0 towards excess profits duty the Government refunded the sum of Rs. 74,961.9.0 paid after the Constitution came into force and refused to refund the sum of Rs. 62,809.5.2, which had been realised prior to January 26, 1950. The appellant filed a petition in the High Court for the issue of a writ of mandamus against the respondents directing them to perform their statutory duty and to refund the amount of Rs. 62,809.5.2. The High Court dismissed the writ petition. It was held by the Supreme Court that a petition under Art.226 of the Constitution of India solely for the issue of a writ of mandamus directing the State to refund money alleged to have been illegally collected by the State as tax was not ordinarily maintainable because a claim for such a refund could always be made in a suit against the authority which illegally collected the money as tax; that in the absence of statutory provision whereby the tax realised had to be refunded when the appellate authority set aside the assessments no duty was cast on the State to refund the amount it had realised which was subsequently found by the appellate authority to be not in accordance with law. The mere order of the appellate authority that the tax collected was not authorised by any law was not a decision to the effect that the State was to return the amount to the assessee; nor could it be taken to amount to a law making it incumbent on the State to refund the amount and that the question whether the State was bound under S.72 of the Contract Act to return the amount on the ground that it was paid under a mistake was a matter for decision in a regular suit and not in proceedings under Art.226.