STATE OF MADRAS Vs. MADURA KNITTING COMPANY LIMITED

JUDGEMENT

(1.) THIS is an appeal by the State of Madras represented by the District Collector, Madurai, the defendant in O.S. No. 108 of 1953 on the file of the Subordinate Judge of Madurai, against the judgment and decree therein.

(2.) THE facts are briefly these : That was a suit filed by the Madura Knitting Company Ltd., respondent in this appeal, for a declaration that the order of the Commercial Tax Officer dated 30th March, 1951, sustained by the order of the Deputy Commissioner of Commercial Taxes and the Board of Revenue, Madras, cancelling a rebate to the extent of over 22 lakhs granted originally by the Deputy Commercial Tax Officer on 6th December, 1949, in the turnover of the respondent company regarding their export of hosiery goods outside the State was illegal, ultra vires and without jurisdiction, and for an injunction restraining the Deputy Commercial Tax Officer, Madurai Town III, from enforcing the order for the collection of Rs. 17, 204-11-3 issued in pursuance of the cancelled rebate which was also attacked as passed without jurisdiction, and for costs. Under rule 9 of the Madras General Sales Tax Rules, which applies to this case, every person claiming a rebate under section 7 shall submit to the assessing authority an application in Form 8 within three months of the delivery of the articles outside the Province, and rule 10 says that on receipt of the application the assessing authority shall, after satisfying himself that the application is in order, and that the rebate is admissible, send to the applicant a refund order for the amount of the rebate due, if the tax has already been paid, or if the assessment had been provisionally made under rule 7 or 8 of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939, adjust the amount at the time of the final assessment under rule 11. THE respondent in this case submitted an application under rule 9 in time only for the months of February and March, 1949. But it claimed a rebate on a turnover of more than 24 lakhs for the entire year 1948-49. THE Deputy Commercial Tax Officer pointed to it that there was no application in Form 8 asking for rebate for the other ten months.

(3.) THEN the respondent filed the suit before the Subordinate Judge against the State of Madras, represented by the Collector of Madurai. It was hotly contested by the State of Madras. The learned Subordinate Judge overruled the contention of the State of Madras that no suit would lie. He also held that the Commercial Tax Officer had no powers under section 12(2) to examine the correctness of the rebate allowed by the Deputy Commercial Tax Officer in his order dated 6th December, 1949. In that view, he granted a decree in favour of the plaintiff-respondent declaring the order of the Commercial Tax Officer dated 30th March, 1951, revising the order of the Deputy Commercial Tax Officer and directing the respondent to pay a sum of Rs. 17, 204-11-3 to be illegal except with regard to a sum of Rs. 171-8-0, a petty amount with which we are not concerned in this appeal, and also directing the State of Madras to pay the plaintiff-respondent a sum of Rs. 2, 136-14-0 for the proportionate costs, and to bear its own costs of Rs. 1, 185-0-