Void tax assessment and ultra vires rule support refund and bar enforcement of recovery certificates.

Tax realised under assessments founded on an ultra vires rule was treated as void and non est, so refund could be granted in writ jurisdiction even though the assessment orders had not first been formally set aside. Section 12 of the Bengal Finance (Sales Tax) Act, 1941, was read as governing excess realisation, not as barring relief where the very basis of assessment was invalid. The Court also rejected the delay objection on the facts. Because the liability itself failed, the recovery certificates issued on those demands could not be enforced, and consequential injunctive relief was available.

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Issues: (i) whether tax paid by a person who was not liable to be assessed as a dealer under the Act and whose assessments were founded on an ultra vires rule could be refunded notwithstanding section 12 of the Act and the absence of a setting aside of the assessment orders; (ii) whether the petitioner was entitled to restrain enforcement of the recovery certificates.

Issue (i): whether tax paid by a person who was not liable to be assessed as a dealer under the Act and whose assessments were founded on an ultra vires rule could be refunded notwithstanding section 12 of the Act and the absence of a setting aside of the assessment orders.

Analysis: The petitioner had paid the tax on the footing that he was a dealer, but the taxing rule under which he had been assessed had already been declared ultra vires, with the result that the assessments were treated as void and non est. Section 12 of the Bengal Finance (Sales Tax) Act, 1941, was construed as reflecting the legislative policy of refunding excess realisation, but not as excluding relief where the very basis of the assessment was void. The Court held that a void assessment need not first be formally set aside before refund can be claimed. The plea of delay was rejected in the circumstances, because the petitioner had been pressing for relief soon after the legal position became clear and the authorities had continued to act on the footing that tax was still payable.

Conclusion: The petitioner was entitled to refund of the tax paid under the void assessments, and the claim was not defeated by section 12 or by the absence of an order setting aside the assessments.

Issue (ii): whether the petitioner was entitled to restrain enforcement of the recovery certificates.

Analysis: Once it was found that the petitioner was not liable for the tax and that the assessments were void, the recovery certificates based on those demands could not be enforced against him.

Conclusion: The petitioner was entitled to the injunction restraining enforcement of the certificates.

Final Conclusion: The writ petition succeeded, refund was directed in respect of the sums proved to have been paid, and coercive recovery on the impugned certificates was prohibited.

Ratio Decidendi: Where tax is realised under an assessment that is void because it rests on an ultra vires provision, the payer may obtain refund in writ jurisdiction without first securing formal setting aside of the null assessment, and the court may grant consequential injunctive relief against recovery.

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