STATE OF BOMBAY Vs. PURSHOTTAMDAS DWARAKADAS PATEL

JUDGEMENT

(1.) In this reference we are concerned with a question about the authority of the Sales Tax Officer to grant refund of sales tax paid under an order of assessment on a certain view of the law, the law being thereafter differently interpreted by the Supreme Court.

(2.) Messrs. Purshottamdas Dwarakadas Patel, whom I will hereafter refer to as the assessees, are wholesale and retail dealers in grocery. On 28th November, 1952, the Sales Tax Officer, Patan, in the District of Mehsana assessed the assessees to sales tax for the period between 1st May, 1949, and 31st March, 1951. Under the assessment order made the assessees were liable to pay Rs. 14,185-8-0 as sales tax. The Sales Tax Officer gave credit for Rs. 13,925-11-9 which had already been paid by the assessees as tax and called upon them to pay the balance of Rs. 259-12-3. On 11th December, 1952, the balance of Rs. 259-12-3 was paid by the assessees. Against the order of assessment no appeal was preferred by the assessees. It appears that about this time there was pending an appeal [The State of Bombay v. The United Motors (India) Ltd. ([1953] 4 S.T.C. 133)] before their Lordships of the Supreme Court in which a question as to the competence of the legislature of a State to pass an Act levying sales tax on inter-State transactions fell to be decided. Expecting that the Supreme Court may hold that the Legislature of the State had no authority to enact legislation to tax inter-State transaction, the assessees on 1st March, 1953, applied to the Sales Tax Officer for refund of Rs. 1,192-11-0 alleging that the levy was unauthorised. This application was in the form of a letter addressed to the officer. No action was taken on that letter by the Sales Tax Officer. On 30th March, 1953, their Lordships of the Supreme Court delivered their judgment holding that the Bombay State Legislature has no power to impose sales tax on transactions of sale taking place outside the the State of Bombay. On 5th June, 1953, the assessees again addressed a letter to the Sales Tax Officer asking for refund of Rs. 13,697-0-0. The application was also not in the form prescribed under the Sales Tax Act. On 23rd December, 1954, the Sales Tax officer informed the assessees that no refund could be granted by him and that the remedy of the assessees, if any, was to prefer an appeal against the order of assessment. The assessees thereafter preferred an appeal to the Assistant Collector of Sales Tax against the order of assessment. This appeal was evidently filed more than 60 days after the date on which the order of assessment was made. By order dated 7th March, 1955, the Assistant Collector summarily dismissed the appeal holding that it was barred by limitation. On 13th May, 1955, the assessees preferred a revision application to the Collector of Sales Tax. That application was rejected on 29th July, 1955, and against that order a revision application was filed to the Sales Tax Tribunal. On the assumption that the order challenged by appeal to the Assistant Collector was the order refusing to grant refund on the ground that the application was not in the prescribed form and on the view that the Assistant Collector and the Collector were in error in so holding, the Tribunal by order dated 16th April, 1956, set aside the order of the Collector and the Assistant Collector and directed that the applications for refund submitted by the assessees be inquired into and decided by the Sales Tax Officer in accordance with law. Against that order an application was filed praying that a reference be made to this Court under section 34 of the Bombay Sales Tax Act, 1953. On that application the Tribunal have referred four questions to us, and those questions are :

(3.) From the proceedings of the Assistant Collector and the Collector it appears to us that some unfortunate error has crept into the proceedings of the Sales Tax Tribunal. The Sales Tax Tribunal assumed that by the appeal before the Assistant Collector and the Collector the order refusing to grant refund was sought to be challenged. In fact the appeal filed before the Assistant Collector and the revision application filed before the Collector challenged the validity of the order of assessment made on 28th November, 1952. It is clear from the memo of appeal filed against the judgment of the Assistant Collector that the appeal was only filed against the order dated 28th November, 1952, passed by the Sales Tax Officer, Patan, for the assessment period between 1st May, 1949, and 31st March, 1951. It is conceded before us that there was no appeal before the Assistant Collector against the order refusing to grant refund. Prima facie therefore it was apparent that the Sales Tax Tribunal was incompetent to enter upon an enquiry whether the order passed by the Sales Tax Officer refusing to grant refund was or was not a proper order. But as certain questions have been referred to us on the application by the Collector, we may not be justified in taking a technical view and in raising a new question which substantially does not arise out of the judgment of the Tribunal and in vacating the order passed by the Tribunal after passing orders on that new question. We have therefore heard counsel for the assessees and counsel for the State of Bombay on the question which have been raised before us and the questions which arise out of the judgment of the Tribunal.