Refund rejection based on overruled precedent must be reconsidered under the later binding law.

A refund refusal under section 14-A of the Orissa Sales Tax Act could not be sustained after the Supreme Court upheld the provision and overruled the earlier view treating it as ultra vires. Because the administrative order rested entirely on precedent that had later disappeared, the sales tax authority was required to reconsider the claim under the revised binding law. The refusal was therefore set aside and the refund application remitted for fresh decision according to law.

---

---

Issues: Whether the rejection of the refund application under section 14-A of the Orissa Sales Tax Act could stand in view of subsequent Supreme Court decisions upholding the validity of that provision.

Analysis: The refund application had been rejected on the basis of earlier decisions which had treated section 14-A as ultra vires. The legal position had since changed because the Supreme Court later upheld the provision and expressly overruled the earlier view on which the rejection rested. In these circumstances, the order refusing refund could not be sustained without reconsideration by the sales tax authority in light of the later binding rulings.

Conclusion: The matter required fresh consideration by the Commissioner of Sales Tax and the rejection order was set aside.

Final Conclusion: The writ application succeeded to the extent that the impugned refusal was vacated and the refund claim was sent back for reconsideration according to law.

Ratio Decidendi: Where the legal foundation of an administrative order disappears because the precedent on which it was based has been overruled, the matter must be reconsidered afresh in accordance with the revised binding law.

---