Purposive reading of remission circular extends to refund where dealer paid tax from its own pocket

A remission circular relieving a specified class of dealers from sales tax, interest and penalty for a defined period was construed purposively to cover refund of tax already paid from the dealer's own funds, even though the circular did not expressly mention refund. The Court reasoned that a literal reading would defeat the object of the remission and create an irrational distinction between dealers who had paid tax and those who had not. Because the authorities found that the dealer had not passed on the burden to customers and had deposited the tax from its own resources, the benefit of the circular extended to refund, and the contrary view was unsustainable.

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Issues: Whether a dealer who had paid tax out of its own pocket during a period later covered by a remission circular was entitled to refund, notwithstanding the absence of an express refund clause.

Analysis: The dispute concerned a class of certificate-holding dealers for whom the State had later decided not to recover sales tax, interest or penalty for the interregnum period. The Court held that the circular had to be read in light of its object and the factual background in which it was issued. A literal reading denying refund merely because the circular did not expressly mention refund would defeat the purpose of the remission and create an irrational distinction between dealers who had not passed on the tax burden and those who had not paid at all. Since the authorities had concurrently found that the dealer had deposited the amount from its own resources and had not recovered it from customers, the benefit of the remission necessarily extended to refund in such a case.

Conclusion: The dealer was entitled to refund of the tax paid under protest from its own pocket, and the Tribunal's contrary view was unsustainable.

Ratio Decidendi: A remission circular intended to relieve a taxed class for a specified period must be construed purposively to include refund of tax already paid by a dealer out of its own pocket, even if refund is not expressly stated, where denial would defeat the object of the relief and produce an unjust result.

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