STATE OF TAMIL NADU Vs. SAKTHI SUGARS LIMITED

JUDGEMENT

(1.) COUNSEL for the State contends that the doctrine of unjust enrichment should be invoked in these cases to sustain the order which had been set aside by the Tribunal. The Tribunal had set aside the order by which penalty had been levied on the dealer, the penalty so levied being due to the fact that the assessee had treated gallonage fee as a part of its turnover and had collected tax from its buyers which it had, admittedly, remitted to the State, although at the time of the collection, by reason of the judgment rendered by this Court in the case of E.I.D. Parry (India) Ltd. galloange fee was not liable to be included. That judgment of this Court was made on November 14, 1978 and is reported in [E.I.D. Parry (India) Ltd. v. State of Tamil Nadu]. However, an appeal had been preferred against that judgment and that appeal was apparently pending during the assessment years in question, viz., 1979-80 and 1980-81.

(2.) IT is the submission of the State's counsel that by permitting the dealer to obtain refund of those sums, the State would, in effect, be allowing the unjust enrichment of the dealer as those amounts are not likely to be passed on to the persons from whom it had been collected. In order to offset the effect of the refund, the authority had imposed a penalty with a condition that if satisfactory arrangements are made by the dealer to refund the amount that the dealer had collected from its customers within 30 days, the amount of tax recovered as penalty would be refunded.