State levy beyond legislative competence; refund limited by delay and unjust enrichment, with later-period consequential relief allowed.

The charging, exemption and valuation provisions were read together, and the levy was treated in substance as a tax on despatch or consignment of goods manufactured in West Bengal outside the State; on that footing, the provisions were held to be beyond the State's legislative competence and invalid to the extent previously declared unconstitutional. Refund for tax paid from 10 October 1977 to 10 September 1990 was refused because the claims were stale, the payments were made without protest, and the doctrine of unjust enrichment was applied. Consequential relief was allowed for the later period, including refund of tax and related interest, and declaration forms could not be withheld for non-payment of the invalid levy after 11 September 1990.

---

---

Issues: (i) Whether the purchase tax provisions under the Bengal Finance (Sales Tax) Act, 1941 and the West Bengal Sales Tax Act, 1954, as amended, were within the legislative competence of the State and valid; (ii) Whether refund could be granted for purchase tax paid before 11 September 1990 in view of delay, limitation and unjust enrichment; (iii) Whether the applicants were entitled to consequential relief including non-withholding of declaration forms and refund of amounts paid on or after 11 September 1990.

Issue (i): Whether the purchase tax provisions under the Bengal Finance (Sales Tax) Act, 1941 and the West Bengal Sales Tax Act, 1954, as amended, were within the legislative competence of the State and valid.

Analysis: The charging provisions and the exemption/valuation provisions were construed together to ascertain the true nature of the levy. On that combined reading, the impost was treated as one that operated on despatch or consignment of goods manufactured in West Bengal outside the State, rather than as a mere purchase tax simpliciter. The validating and amending provisions did not alter that essential character. The earlier view striking down the levy was followed and reinforced by the later Supreme Court authorities on the constitutional limits of such imposts.

Conclusion: The provisions were held to be outside the State's legislative competence and invalid to the extent earlier declared unconstitutional.

Issue (ii): Whether refund could be granted for purchase tax paid before 11 September 1990 in view of delay, limitation and unjust enrichment.

Analysis: Although money paid under mistake of law is ordinarily refundable, the remedy is controlled by equitable considerations in writ-type relief and by the doctrine of unjust enrichment. The applicants had paid the tax without protest for a long period, and the burden was treated as having been passed on in the ordinary course of trade. The Tribunal therefore declined to order repayment for the period preceding the earlier declaration of invalidity, and held that stale claims and the practical consequences of refunding long-collected indirect tax justified denial of relief for that earlier period.

Conclusion: Refund was refused for the period from 10 October 1977 to 10 September 1990.

Issue (iii): Whether the applicants were entitled to consequential relief including non-withholding of declaration forms and refund of amounts paid on or after 11 September 1990.

Analysis: Once the levy had already been declared invalid, the authorities could not insist on collection of the impugned tax for the later period or withhold declaration forms for non-payment of that tax. The applicants were entitled to refund of tax and related interest, if any, realised for the period after the date of invalidity, with verification of particulars before payment.

Conclusion: Consequential relief was granted, including refund for the later period and issuance of declaration forms without regard to non-payment of the impugned tax after 11 September 1990.

Final Conclusion: The applications succeeded only in part: the impugned levy could not be enforced for the period after the earlier declaration of invalidity, but refund was denied for the prior period on equitable grounds.

Ratio Decidendi: In determining the constitutional validity of a fiscal levy, the charging provisions must be read with the connected exemption and valuation provisions to ascertain the true nature of the impost; where the levy is in substance beyond legislative competence, refund may still be restricted by delay and unjust enrichment.

---