Refund of sales tax on declared goods cannot be defeated by an unreasonable limitation period in the rules.

Rule 35 of the Bihar Sales Tax Rules, 1983 prescribed a three-month period for claiming refund of sales tax paid on declared goods later sold in inter-State trade, but section 15(b) of the Central Sales Tax Act, 1956 requires reimbursement of such State tax subject only to valid statutory manner and conditions. As the Bihar Finance Act, 1981 did not contain a comparable authorising provision for imposing a limitation period, the rule was treated as an unreasonable restriction. The limitation could not defeat the statutory right to refund, and the refund claim remained maintainable.

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Issues: Whether the period of three months prescribed by rule 35 of the Bihar Sales Tax Rules, 1983 for claiming refund of sales tax paid on declared goods, sold thereafter in the course of inter-State trade or commerce, was valid and enforceable under section 15(b) of the Central Sales Tax Act, 1956.

Analysis: Section 15(b) of the Central Sales Tax Act, 1956 requires reimbursement of State tax levied on declared goods when such goods are subsequently sold in inter-State trade or commerce, subject to the manner and conditions provided by the State law. The Bihar Finance Act, 1981 did not contain a provision comparable to the laws relied on from other States that expressly authorised prescription of limitation as a condition for refund. Rule 35, insofar as it fixed a three-month period for making the refund claim, was examined against the statutory scheme and the binding effect of the Supreme Court's ruling on a similar limitation provision. The prescribed period was held to be unreasonable and unsustainable.

Conclusion: The limitation contained in rule 35 could not defeat the statutory right to refund, and the refund claim was maintainable.

Ratio Decidendi: A rule-making authority cannot prescribe an unreasonable limitation period that curtails a statutory right to refund of tax on declared goods where the parent statute does not validly authorise such restriction.

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