Constitutional protection for export sales supports refund suits, with limitation running from final assessment and civil court jurisdiction preserved.

Cocoanuts exported outside the State for consumption fell within the protection of Article 286(1)(a), because the pleadings so asserted, the allegation was not denied, and no contrary evidence was produced. The suits for refund were within limitation, as the right to claim arose only on final assessment under the assessment rules, not on the monthly returns, and they were filed within three years of that assessment. Section 18-A of the Madras General Sales Tax Act did not bar the suits, since they did not seek to set aside the assessment but challenged tax collection contrary to the constitutional restriction, and civil courts were competent to entertain them.

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Issues: (i) Whether cocoanuts exported outside the State were exported for consumption so as to attract the protection of Article 286(1)(a) of the Constitution; (ii) whether the suits for refund were barred by limitation, the period running from the monthly returns or from the final assessment; (iii) whether the suits were barred by section 18-A of the Madras General Sales Tax Act.

Issue (i): Whether cocoanuts exported outside the State were exported for consumption so as to attract the protection of Article 286(1)(a) of the Constitution.

Analysis: The evidence showed that the cocoanuts were sent outside the State for the purpose of consumption. The pleadings specifically asserted that the exports were for consumption, the allegation was not denied, and no contrary evidence was produced. The Court found that the requirement in the Explanation to Article 286(1)(a) was satisfied.

Conclusion: The issue was answered in favour of the assessee.

Issue (ii): Whether the suits for refund were barred by limitation, the period running from the monthly returns or from the final assessment.

Analysis: Section 3(1)(a) of the Madras General Sales Tax Act made the tax payable for each year on total turnover, while the monthly returns under the rules were only for convenience and were provisionally accepted. The right to claim refund arose only on final assessment under rule 13(5) of the Madras General Sales Tax (Turnover and Assessment) Rules. Since the suits were filed within three years from the date of final assessment, they were within time.

Conclusion: The issue was answered in favour of the assessee.

Issue (iii): Whether the suits were barred by section 18-A of the Madras General Sales Tax Act.

Analysis: Section 18-A was held inapplicable because the suits did not seek to set aside or modify the assessment. They challenged the authority to collect tax in view of Article 286(1)(a) of the Constitution. Civil courts were held competent to entertain such suits.

Conclusion: The issue was answered in favour of the assessee.

Final Conclusion: The assessment-based objection, limitation defence, and jurisdictional objection all failed, and the refund suits were maintainable.

Ratio Decidendi: Where tax is collected contrary to constitutional restriction, a suit for refund is maintainable in civil court, and limitation runs from the final assessment that gives rise to the refund claim.

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