Refund of sales tax cannot be denied because the dealer recovered it from customers; lawful refund must be returned.

Refund of sales tax already deposited could not be denied merely because the dealer had recovered the tax from customers. The assessment orders had sanctioned the refund and the applications were filed within time; the objection based on pass-through collection was held legally irrelevant. The authority had no right to retain money refundable under the Act, and discretion could not be exercised on grounds without legal foundation. Continued retention would amount to deprivation of property without authority of law and would offend the constitutional requirement that tax be levied and retained only by authority of law. Immediate refund, with admissible interest and costs, was directed.

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Issues: Whether the petitioner was entitled to refund of sales tax already deposited, notwithstanding that it had collected the tax from customers.

Analysis: The refund had been sanctioned by the assessment orders and the applications were filed in time. The only objection was based on the petitioner having recovered sales tax from customers. That circumstance was held irrelevant to the legal entitlement to refund, because the tax deposited was not the respondent's property and the authority had no right to retain money bound to be refunded under the Act. Discretion could not be exercised against the petitioner on considerations having no legal foundation. Retention of the amount would amount to deprivation of property without authority of law and would offend the constitutional requirement that tax can be levied and retained only by authority of law.

Conclusion: The petitioner was held entitled to immediate refund, with interest if admissible in law, and costs.

Final Conclusion: The refund claim succeeded and the tax authorities were directed to return the amount lawfully due to the petitioner.

Ratio Decidendi: Tax authorities cannot refuse refund of tax lawfully found refundable on the ground that the dealer recovered it from customers, as retention of money not belonging to the State and refundable under law is impermissible.

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