Consequential tax refund under Article 226 remains discretionary, and delay with unchallenged assessments can bar relief.

Under Article 226, a writ may include consequential refund of tax where the assessment or levy itself is challenged, but a standalone refund claim is ordinarily not entertained while the assessment order remains in force. The article notes that relief can be refused in discretionary jurisdiction where the petition is brought after gross delay and the statutory appellate remedy was not pursued. It also states that payment of tax may still be under mistake of law if that was the payer's actual state of mind, and that an earlier judicial decision does not by itself negate the plea. The assessments were left undisturbed and refund relief was declined on procedural grounds.

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Issues: (i) whether a writ petition under Article 226 of the Constitution of India was maintainable when the relief sought included quashing of the assessment orders and refund of tax collected on contracts alleged to be works contracts; (ii) whether the petitioners were disentitled to relief because of delay, failure to pursue statutory appeals, and the need to first set aside the assessment orders before refund could be claimed; (iii) whether payment of tax after an earlier judicial decision negatived the plea of mistake of law for refund purposes.

Issue (i): whether a writ petition under Article 226 of the Constitution of India was maintainable when the relief sought included quashing of the assessment orders and refund of tax collected on contracts alleged to be works contracts.

Analysis: Relief under Article 226 can include consequential repayment of money realised without authority of law where the assessment or levy itself is challenged and appropriate circumstances exist. A petition confined only to refund is ordinarily not entertained, but that rule does not control a case where the assessment orders are also assailed and refund is sought as consequential relief. The authorities relied upon by the respondents were read as turning on their facts and not as laying down an absolute bar.

Conclusion: The petition was maintainable in principle under Article 226 insofar as it combined challenge to the assessment orders with a prayer for consequential refund.

Issue (ii): whether the petitioners were disentitled to relief because of delay, failure to pursue statutory appeals, and the need to first set aside the assessment orders before refund could be claimed.

Analysis: The assessment orders had become final long before the writ petitions were filed, and the petitions were presented after a lapse of several years. The petitioners had not pursued the statutory appellate remedy and had instead taken recourse to applications for rectification and refund, which were misconceived because refund could not be directed while the assessment orders stood. In discretionary jurisdiction, unreasonable delay and the existence of prima facie issues such as limitation justified refusal of relief.

Conclusion: The petitioners were not entitled to relief because the petitions were grossly delayed and the assessment orders were not first challenged through the proper statutory course.

Issue (iii): whether payment of tax after an earlier judicial decision negatived the plea of mistake of law for refund purposes.

Analysis: The relevant test is the state of mind of the payer, not the standard of a prudent or diligent assessee. A payment may still be under mistake of law if the payer was in fact under that mistake when the tax was paid, even if a correct legal position might have been discoverable with diligence. The existence of an earlier decision did not by itself conclude the question against the petitioners.

Conclusion: Mere possibility of knowledge did not automatically defeat the plea of mistake of law, though the petition ultimately failed on delay and procedural grounds.

Final Conclusion: The writ petitions were declined in the exercise of discretionary jurisdiction because the challenge to the assessment orders and the consequential refund claims were brought too late and through an improper procedural route, leaving the assessments undisturbed.

Ratio Decidendi: Consequential refund under Article 226 is discretionary and ordinarily requires a timely challenge to the assessment or levy itself, because a refund claim cannot be entertained while the assessment order stands and unreasonable delay can bar relief.

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