Refund under sales tax law requires prior setting aside of the assessment order before any inconsistent relief can be granted.

A refund claim under the C.P. and Berar Sales Tax Act was held not maintainable where the underlying assessment order had not first been set aside or modified. The statute authorised refund only of tax or penalty paid in excess of the amount lawfully due, and that lawful liability had to be determined through assessment or reassessment proceedings. So long as the assessment remained operative, the taxing authority could not disregard it or grant a refund inconsistent with that order. The principle applied was that a valid assessment remains effective until altered in appeal or revision, and the authority cannot review its own decision to grant contrary relief.

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Issues: Whether a refund claim under section 13 of the C.P. and Berar Sales Tax Act, 1947 was maintainable without first setting aside the assessment order.

Analysis: Section 13 authorised refund only of tax or penalty paid in excess of the amount lawfully due under the Act. The amount lawfully due had to be determined in the assessment or reassessment proceedings, and so long as the assessment order remained in force, the dealer could not require the taxing authority to ignore it and grant a refund inconsistent with that order. An order validly made by the authority under the Act remained effective until altered in appeal or revision, and the authority had no power to review its own decision and direct a refund contrary to an unchallenged assessment order.

Conclusion: The refund application was not maintainable and the answer is against the assessee.

Ratio Decidendi: A refund under the sales tax statute cannot be granted on the premise that the assessment was erroneous unless the assessment order has first been set aside or modified in appropriate proceedings under the Act.

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