1997 (1) TMI 511 - AT - VAT and Sales Tax

Tribunal quashes tax orders, dissenting judgment upholds, petition dismissed with costs

Gem Cinema and Another Versus State of Rajasthan and Others

Gem Cinema and Another Versus State of Rajasthan and Others - [1998] 108 STC 189 (Raj[TT]) Issues Involved:1. Power to amend assessment orders under Rule 32.2. Retention of the excess amount by the petitioner.3. Claim of the excess amount by the department.Issue-wise Detailed Analysis:1. Power to Amend Assessment Orders under Rule 32:The primary question was whether the Commercial Taxes Officer (respondent No. 3) had the authority to amend the assessment orders dated March 19, 1975, under Rule 32 of the Rajasthan Entertainments and Advertisements Tax Rules, 1957, on the grounds of a mistake apparent from the record. The petitioner argued that the respondent No. 3 lacked this power as no mistake was apparent on the face of the record. The Tribunal analyzed Rule 32, which allows for the rectification of mistakes apparent from the record, and concluded that the excess surcharge collected and deposited did not belong to the petitioner, thus constituting a mistake apparent from the record. Consequently, the Tribunal held that respondent No. 3 was justified in amending the assessment orders on June 29, 1978, to rectify this mistake.2. Retention of the Excess Amount by the Petitioner:The petitioner contended that the excess amount of Rs. 12,362.30, collected as surcharge, was not authorized under the Act and Rules, and thus the State was not entitled to reclaim it. The Tribunal, however, held that the excess amount collected did not belong to the petitioner. The Tribunal emphasized that the amount was collected from the viewers and should either be refunded to them or deposited with the State. The Tribunal referenced the doctrine of unjust enrichment and determined that the petitioner had no legal or moral right to retain the excess amount.3. Claim of the Excess Amount by the Department:The department argued that the petitioner was not entitled to retain the excess amount collected as surcharge, as it was collected from the viewers and should be returned to the State. The Tribunal agreed with this contention, stating that the excess amount collected should either be refunded to the viewers or deposited with the State, as the petitioners had no lawful claim over it. The Tribunal cited various Supreme Court judgments to support this view, emphasizing that the State Legislature has the competence to enact laws providing for the refund of amounts wrongly collected and for the imposition of penalties to ensure proper implementation of taxing laws.Conclusion:The Tribunal allowed the writ petition, quashing the orders dated June 29, 1978, and August 21, 1980, passed by the Commercial Taxes Officer and the Commissioner, Commercial Taxes, respectively. The respondents were restrained from recovering the excess amount of Rs. 12,362.30 collected by the petitioner as surcharge. However, a separate judgment by the Judicial Member dissented, upholding the orders and dismissing the petition with costs and interest on the amount. The Technical Member concurred with the Judicial Member, resulting in the dismissal of the petition.