Interim stay in indirect tax matters declined where the burden is passed on and unjust enrichment applies.

Interim stay against deduction of tax under section 7(7B) of the Kerala General Sales Tax Act was declined because indirect tax is ordinarily passed on to consumers, making interlocutory restraint on collection of public revenue inappropriate on the facts. The Court accepted reliance on the doctrine of unjust enrichment and found no sufficient basis for admission-stage interference. The constitutional challenge to the amendment was not examined at that stage, and the writ appeals failed accordingly.

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Issues: Whether interim stay could be granted against deduction of the amount payable under sub-section (7B) of section 7 of the Kerala General Sales Tax Act, 1963, as amended, and whether the challenge to the amendment justified interference at the admission stage.

Analysis: The Court noted that the refusal of interim relief was based on the established caution applicable to indirect taxation matters, where the tax burden is ordinarily passed on to the consumer. It held that there was no error in relying on the doctrine of unjust enrichment and that such interim protection against collection of public revenue was not warranted on the facts. The constitutional challenge to the amendment was not examined at this interlocutory stage.

Conclusion: Interim stay was rightly declined and the appeals were liable to be dismissed.

Final Conclusion: The order refusing interim relief was upheld, and the writ appeals failed at the admission stage.

Ratio Decidendi: In matters of indirect taxation, interim restraint against collection or deduction of tax should not be granted where the burden has been passed on to the consumer and no sufficient basis for interlocutory interference is made out.

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