Retrospective CST condition bars retention of State sales tax refund on declared goods without inter-State tax payment.

Section 15 of the Central Sales Tax Act, 1956, as retrospectively amended by section 12(a) of the Central Sales Tax (Amendment) Act, 1972, required payment of Central sales tax on the inter-State sale before any refund of State sales tax on declared goods could be retained. The Gujarat HC noted that this condition applied from the inception of the provision and controlled the operation of the Bombay sales tax refund provisions in section 44 of the 1959 Act and rule 47. In the absence of Central sales tax payment, the State refund machinery could not be used to preserve the refund, and no refund was admissible.

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Issues: Whether refund of State sales tax on declared goods could be retained when the goods were resold in inter-State trade or commerce but no Central sales tax had been paid on those sales, in the light of section 15 of the Central Sales Tax Act, 1956, section 44 of the Bombay Sales Tax Act, 1959, section 46B of the Bombay Sales Tax Act, 1953, and rule 47 of the Bombay Sales Tax Rules, 1959.

Analysis: Section 15 of the Central Sales Tax Act, 1956 was intended to control and restrict State taxation on declared goods and to prevent taxation at more than one stage beyond the prescribed limit. The amendment made by section 12(a) of the Central Sales Tax (Amendment) Act, 1972 introduced, with retrospective effect from 1 October 1958, the requirement that refund of State tax would be available only where Central sales tax had been paid on the inter-State sale. Once so amended, the provision had to be read as part of the law from its inception, and the State refund provisions in section 44 of the Bombay Sales Tax Act, 1959 and rule 47 could not be construed as permitting refund contrary to that condition. The absence of a corresponding amendment in the State Act or Rules did not preserve a right to refund where the statutory condition under the Central Act was not satisfied.

Conclusion: Refund was not admissible in the absence of payment of Central sales tax on the inter-State sale, and the assessee's claim to retain the refunded amount failed.

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