B K BAJAJ Vs. STATE OF PUNJAB

JUDGEMENT

(1.) B. K. Bajaj and K. K. Bajaj, proprietors of Messrs Eagle Laboratories, Patiala, in this writ petition under Articles 226/227 of the Constitution of India have prayed that the respondents, namely, the State of Punjab and the Excise and Taxation Commissioner, should be directed to refund the amount of sales tax recovered from them during the years 1957-58 onwards.

(2.) THE facts alleged by them in support of their prayer briefly stated are these. The petitioners have been manufacturing spirituous medicinal and toilet preparation at Patiala for a long time. In pursuance of item No. 37 in Schedule "b" of the Punjab General Sales Tax Act, 1948, the medicinal (spirituous) preparations containing alcohol manufactured in Punjab were exempted from payment of sales tax under the Punjab General Sales Tax Act. Thus no sales tax was being levied on this medicinal preparation in Punjab. Subsequently the Union Parliament enacted the Medicinal and Toilet Preparations (Excise Duties) Act, 1955, which came into force on 1st April, 1957, and this amongst other things also provided in Section 21 that, "if there is in force in any State any law corresponding to this Act that law is hereby repealed. " With the corning into force of the Central Act on 1st of April, 1957, the excise duty is levied on the spirituous medicinal and toilet preparations under the said Act. Respondent No. 2 started to recover sales tax under the East Punjab General Sales Tax Act, 1948 (hereinafter referred to as the Act) on the sales of spirituous medicinal and toilet preparations manufactured by the petitioners on the assumption that the exemption granted to the sale of medicinal and toilet preparations under item No. 37 in Schedule "b" of the Sales Tax Act was no longer available as the excise duty was not charged on such goods under the Punjab Excise Act. They paid Rs. 1,513. 67 P. , Rs. 1,711. 73 P. , Rs. 11,007. 58 P. , and Rs. 1,618. 68 P. as State sales tax for the years 1957-58, 1958-59, 1959-60 and 1960-61 respectively. The total amount paid on this account came to Rs. 15,851. 66 P. In addition they paid Rs. 700, Rs. 4,149. 30 P. and Rs. 764. 42 P. as Central sales tax for the years 1958-59, 1959-60 and 1960-61 respectively, the total came to Rs. 5,613. 72 P. Subsequently the view of respondent No. 2 that with the coming into force of the Medicinal and Toilet Preparations (Excise Duties) Act, 1955, the exemption from payment of sales tax on the goods manufactured by the petitioners came to an end was overruled by Harbans Singh, J. , in Civil Writ No. 926 of 1964 (Sukh Dev Samp Gupta v. The Punjab State and Ors. 1965 Cur. L. J. 335 decided on 11th February, 1965 ). The Letters Patent Appeal against the order of Harbans Singh, J. , was dismissed by a Division Bench of this Court. See the Punjab State and Ors. v. Sukh Dev Sarup Gupta 1966 Cur. L. J. 572. The petitioners relying on the rule laid down in the above case alleged that the respondents have unlawfully recovered the amounts in question and so they should be directed to refund the same.

(3.) THE, respondents in their written statement explained that Rs. 7,473 were recovered from the petitioners under the Punjab General Sales Tax Act, 1948, and Rs. 14,992. 33 under the Central Sales Tax Act, 1956. The learned counsel for the respondents in view of the rule laid down by this Court in Sukh Dev Sarup Gupta's case2 had not much to say against the petitioners' plea that they were not liable to pay the State sales tax and the Central sales tax from 1957-58 onwards. He, however, maintained that the respondents could not pray for the refund of the State sales tax in a writ petition because the amounts alleged to have been paid by them under these two heads had not been admitted as correct by the respondents. Indeed such disputed questions of facts cannot be gone into in the exercise of writ jurisdiction. He also urged that the Union of India should have been made a party to the writ petition as refund of the amounts paid by the petitioners towards the Central Sales Tax Act from 1957-58 also had been claimed. He relied on Suganmal v. State of Madhya Pradesh and Ors. A. I. R. 1965 S. C. 1740 which lays down-Though the High Courts have power to pass any appropriate order in the exercise of the powers conferred on them under Article 226 of the Constitution, a petition solely praying for the issue of a writ of mandamus directing the State to refund the money alleged to have been illegally collected by the State as tax is not ordinarily maintainable for the simple reason that a claim for such a refund can always be made in a suit against the authority which had illegally collected the money as a tax and in such a suit it is open to the State to raise all possible defences to the claim, defences which cannot, in most cases, be appropriately raised and considered in the exercise of writ jurisdiction.