STATE OF ANDHRA Vs. KRISHNA COCOANUT COMPANY

JUDGEMENT

(1.) THIS appeal is by the State of Andhra and is directed against the decree granted by the Subordinate Judge, Amalapuram, in favour of the plaintiff-respondent which is a firm carrying on business at Ambajipet in the East Godavary District. In the suit, the plaintiff sought to recover from the appellant a sum of Rs. 14,101-13-9 made up of a sum of Rs. 13,948-6-9 stated to have been illegally collected from the plaintiff-firm by way of sales tax under the Madras General Sales Tax Act and a sum claimed by way of interest thereon. The learned Subordinate Judge decreed the first but not the second of these sums. In this appeal, although the State questioned in its memorandum of grounds the entirety of the decree thus made, it is stated at the hearing before us by counsel on its behalf that, in the light of binding authority, it concedes that a part of the amount was rightly decreed. The controversy before us has thus been confined to the question as to whether the decree of the court below should be set aside to the extent to which it is objected to by the appellant.

(2.) IN order to understand the scope of that controversy it is necessary to bear the following facts in mind. At the material point of time, the plaintiff-firm carried on the business of exporting cocanuts and copra outside the territory of the madras State within which the East Godavary district was then comprised. The transactions now in question relate to the period from 1st April, 1949, to 31st March, 1950, and it is common ground between the parties that all of them are what may be called inter-State sales. On the basis of the periodical returns submitted by the plaintiff, the Deputy Commercial Tax Officer, Amalapuram, determined the net actual turnover of the plaintiff's business for the aforesaid period at Rs. 8,92,699-2-3 by his order dated 16th October, 1950. In that order, he has stated :-

(3.) NOW in this case, we must remember that the plaintiff as well as the defendant proceeded upon the footing that the tax was properly leviable and the plaintiff paid the tax without demur. Naturally therefore it did not take any proceedings to attack the validity of the order of assessment. Nearly three years went by after that order was passed before the plaintiff came to Court complaining that there was an illegal levy. Now, upon the position taken up by the counsel, a substantial portion of the tax was properly levied and collected. But in spite of this fact, says counsel, as a portion of the tax collected - although it is a portion which can easily be determined by the simplest of calculations - cannot be justified by law, his client is entitled to a refund of the whole of the sum received by the State. If this submission be right, then where a tax levied and collected amounts to a lakh of rupees and an objection could be sustained to the levy of a sum of Rs. 1,000 therein, the assessee need not take up the matter in appeal to the authorities to whom appeals lie under the Act, but can wait for nearly a period of three years and then ask the civil Court for a refund of the whole sum of one lakh leaving it to the authorities to take their chance of finding the assessee solvent to realise from him the sum of Rs. 99,000, which by a re-assessment they could rightfully demand. Such a view would expose the taxing authorities to the liability of having to refund the whole of the tax collected by them in any case in which the assessee comes to the Court and shows that a part of the sum collected could not be legally levied.