Refund of tax collected without valid assessment follows once the underlying liability is annulled and no lawful basis remains.

Tax collected for a pre-registration period cannot be retained once the assessment covering that period is annulled and no valid quantification of liability survives. The governing principle is that tax may be levied or collected only under authority of law; an unauthorised collection has no lawful basis even if it relates to the dealer's own pre-registration liability. On that footing, the assessee is entitled to refund of the amount collected, with admissible interest, because the revenue has no authority to keep money realised without a valid assessment.

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Issues: Whether tax collected for the pre-registration period could be retained and whether the assessee was entitled to refund after the assessment for that period was annulled.

Analysis: The assessment covering the entire pre-registration period was held to be unsustainable and was annulled in appeal. Once no valid assessment or lawful quantification of liability survived, the amount collected from the assessee could not be retained by the revenue. The governing principle is that tax cannot be collected or retained except in accordance with law, and any unauthorised collection offends the constitutional requirement that no tax shall be levied or collected except by authority of law. The fact that the amount related to the dealer's own liability for the pre-registration period did not alter the position, because no lawful basis remained for the demand.

Conclusion: The assessee was entitled to refund of the tax collected, together with admissible interest, and the claim succeeded.

Final Conclusion: Tax realised without a valid assessment or lawful basis cannot be retained by the State and must be refunded.

Ratio Decidendi: Where an assessment is annulled and no lawful quantification of tax liability remains, the revenue has no authority to retain the amount collected, and refund follows as a matter of constitutional and statutory right.

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