Refund of sales tax upheld where later court rulings exposed the levy mistake and laches did not bar relief.

Refund of sales tax collected under levy orders was held to be due once earlier judicial and Tribunal decisions established that transactions before 2 February 1983 were not taxable. The court treated the mistake as discovered when those decisions were rendered, and found that the petitioners acted promptly thereafter, so the doctrine of laches did not bar relief under Article 226. The State's pending appeal did not defeat the refund claim in the absence of any stay or other disabling order. The tax amounts were directed to be refunded after verification within the stipulated time, with interest if payment was delayed.

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Issues: Whether the petitioners were entitled to refund of sales tax collected under the levy orders, and whether the claim was barred by delay or the pendency of the State's appeal.

Analysis: The basis of the refund claim arose only when the Court had earlier held that transactions under the levy orders prior to 2 February 1983 were not taxable, and the Tribunal subsequently reviewed its orders and accepted the appeals on that footing. The mistake was treated as discovered when those decisions were rendered, after which the petitioners promptly pursued refund and then approached the Court without undue delay. The pendency of the State's appeal did not by itself defeat the claim in the absence of any stay or other disabling order. Applying the settled principles governing relief under Article 226 of the Constitution of India and the doctrine of laches, the delay objection was rejected.

Conclusion: The petitioners were entitled to refund of the tax amount, with interest if payment was not made within the time granted.

Final Conclusion: The writ petitions were allowed and the tax amounts were directed to be refunded after verification within the stipulated period.

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