Statutory refund rights cannot be narrowed by delegated rules imposing extra conditions beyond the parent Act.

Section 15(b) of the Central Sales Tax Act was explained as creating a statutory right to refund of State tax on declared goods sold in inter-State trade, and the Court treated actual payment of Central sales tax as no condition precedent for that refund. A delegated rule could regulate the manner, timing and proof of a refund claim, but it could not add a substantive requirement that enlarged the burden beyond the parent statute; the offending words in rule 39-A(1) were therefore ultra vires. The proviso to rule 39-A(3) and Form 4-A were treated as procedural and not struck down, although the earlier proviso demanding proof of Central sales tax payment was ineffective for the relevant past period.

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Issues: (i) Whether rule 39-A of the Mysore Sales Tax Rules was ultra vires in so far as it made payment of Central sales tax a condition precedent for refund of State tax on declared goods sold in the course of inter-State trade or commerce; (ii) Whether the proviso to sub-rule (3) of rule 39-A and Form 4-A could validly operate to impose a retrospective or otherwise invalid restriction on the refund claim.

Issue (i): Whether rule 39-A of the Mysore Sales Tax Rules was ultra vires in so far as it made payment of Central sales tax a condition precedent for refund of State tax on declared goods sold in the course of inter-State trade or commerce.

Analysis: Section 15(b) of the Central Sales Tax Act, 1956, confers the right to refund of State tax when declared goods are subsequently sold in the course of inter-State trade or commerce. The Court held that the statutory right arises on that sale itself, and that actual payment of Central sales tax is neither expressed nor implied as a condition for the right to refund. While rules may prescribe the manner, time, and proof for claiming refund, they cannot add a further condition precedent to the accrual of the right itself. The impugned words in sub-rule (1) therefore travelled beyond the rule-making power.

Conclusion: The additional requirement that the assessee must have paid Central sales tax in respect of such sale was struck down as ultra vires, and the challenge succeeded to that extent.

Issue (ii): Whether the proviso to sub-rule (3) of rule 39-A and Form 4-A could validly operate to impose a retrospective or otherwise invalid restriction on the refund claim.

Analysis: The proviso prescribing a time-limit was treated as procedural and not as necessarily giving retrospective effect to the rule. Since no limitation had existed earlier, the provision was construed to apply when the right was sought to be enforced. The Court further held that a prescribed form cannot override the rule or the statute, and any apparent inconsistency in Form 4-A could not invalidate the refund mechanism. However, the impugned proviso to the earlier form of section 5(4) was held to have been ineffective during its period of operation so far as it required proof that the subsequent sale had borne Central sales tax.

Conclusion: The proviso to sub-rule (3) and Form 4-A were not struck down, but the earlier proviso requiring proof of Central sales tax payment was held ineffective for the relevant past period.

Final Conclusion: The petitions succeeded in part. The impugned demand adjustments were quashed, the authorities were directed to consider refund claims in accordance with the law declared, and the invalid portion of the refund condition was set aside while the remaining procedural framework was left intact.

Ratio Decidendi: A delegated rule may regulate the manner of claiming a statutory refund, but it cannot add a substantive condition precedent to the accrual of the refund right created by the parent statute.

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