Statutory tax refund cannot be withheld for pending review; review notices survive where jurisdiction exists and facts remain open.

A statutory refund of excess sales tax could not be withheld merely because review proceedings were pending, since the refund entitlement under the Bengal Finance (Sales Tax) Act, 1941 arose once the prescribed conditions and time limits were met; refusal on extraneous considerations was illegal, and the withholding was quashed. The notices initiating review were also challenged as without jurisdiction, but the existence of review power was not disputed and questions about unit identity, adequacy of grounds, and bona fides were factual matters for the assessing authority; the jurisdictional challenge therefore failed, and the review proceedings were allowed to continue in accordance with law.

---

---

Issues: (i) whether refund of excess sales tax could be withheld merely because suo motu review proceedings in respect of the assessments were pending; (ii) whether the notices initiating review of the assessments were without jurisdiction.

Issue (i): whether refund of excess sales tax could be withheld merely because suo motu review proceedings in respect of the assessments were pending.

Analysis: Section 12 of the Bengal Finance (Sales Tax) Act, 1941 created a statutory obligation to refund tax paid in excess, subject to the prescribed conditions and the application being made within time. Rules 59 to 62 of the Bengal Finance (Sales Tax) Rules required the assessing authority and the Assistant Commissioner to deal with refund applications within the framework of those statutory conditions. The pendency or proposed initiation of review did not confer any power to suspend or refuse refund on considerations extraneous to the refund provisions. The right to refund accrued once the statutory conditions were satisfied, and the authority dealing with the refund application had to decide it on that basis alone.

Conclusion: The withholding of refund on the ground of pending review was illegal and was quashed.

Issue (ii): whether the notices initiating review of the assessments were without jurisdiction.

Analysis: The challenge to the review notices rested on the contention that the businesses were one unit and that the review was initiated for an improper purpose. However, the existence of power to review was not denied, and the questions whether the assessed businesses were separate units, whether the grounds for review were ultimately sustainable, and whether the proceedings were bona fide were matters for the assessing authority to examine on facts. Those questions did not establish absence of jurisdiction in issuing the notices, and they were left open for decision in the review proceedings.

Conclusion: The review notices were not shown to be without jurisdiction and the challenge failed.

Final Conclusion: Relief was granted only against the illegal withholding of refund, while the review proceedings were permitted to continue for decision in accordance with law.

Ratio Decidendi: Where a statute creates a refund entitlement on satisfaction of specified conditions, the authority cannot refuse or defer refund on considerations outside that statutory framework, and pending review proceedings do not by themselves extinguish the accrued right to seek refund.

---