Concessional tax notifications: differential sales tax for past transactions cannot be recovered after invalidation when excess tax was not collected.

Where dealers acted on concessional sales tax orders while they were operative and did not collect tax above the concessional rate, recovery of the differential for past transactions after those orders were invalidated was held unjust and unreasonable. The High Court quashed the provisional assessments demanding the difference between the concessional rate and the statutory rate, and held that the petitioners were not liable to pay the past differential tax. The Court found it unnecessary to decide the remaining contentions once that conclusion was reached.

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Issues: Whether the petitioners were liable to pay the differential sales tax for the past period after the concessional Government orders granting reduced rates of tax on cement were struck down.

Analysis: The concessional orders issued under the State sales tax law and the Central Sales Tax law were later declared invalid. The Court noted, however, that the petitioners had not collected tax from purchasers in excess of the concessional rates while those orders were in force. In the circumstances, the demand to recover the difference between the concessional rate and the statutory rate for past transactions was held to be unjust and unreasonable. The Court therefore found it unnecessary to decide the remaining contentions.

Conclusion: The petitioners were not liable to pay the differential tax for the past period, and the provisional assessments raising such demand were quashed.

Ratio Decidendi: Where dealers have acted on a concessional tax notification during its operative period and have not collected tax above the concessional rate, the differential tax for past transactions should not be recovered after the notification is invalidated.

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