Suo motu revision and unjust enrichment limit refund claims where tax collected from customers is later refunded under an illegal order.

A statutory suo motu revisional power meant to protect revenue could not be invoked at the assessee's instance, because section 20(2) of the Andhra Pradesh General Sales Tax Act contemplated exercise only by the specified authority where the subordinate order prejudiced revenue. A writ under article 226 was maintainable where the State had no appeal and the impugned orders were said to be without jurisdiction. Amounts collected as Central sales tax and refunded under an illegal order could not be retained, since the exemption applied only to State sales tax and retention after passing on the tax burden would amount to unjust enrichment. The refunded sum had to be restored with interest.

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Issues: (i) Whether the writ petition by the State was maintainable and whether the revisional authority could exercise suo motu powers under section 20(2) of the Andhra Pradesh General Sales Tax Act, 1957 at the instance of the assessee; (ii) Whether the assessee was entitled to retain the refunded amount of Rs. 3.70 crores collected towards Central sales tax.

Issue (i): Whether the writ petition by the State was maintainable and whether the revisional authority could exercise suo motu powers under section 20(2) of the Andhra Pradesh General Sales Tax Act, 1957 at the instance of the assessee?

Analysis: The revisional power under section 20 of the Andhra Pradesh General Sales Tax Act, 1957 was conferred only as a suo motu power exercisable by the specified authorities when the subordinate order was prejudicial to revenue. The scheme of the provision did not permit an assessee to invoke that power at its own instance. In the absence of an appellate remedy available to the State against the revisional and confirming orders, and where the impugned orders were asserted to be without jurisdiction, the State could invoke certiorari under article 226. Delay was not treated as fatal because the matter involved public revenue and the challenge was to an illegal order.

Conclusion: The writ petition was maintainable, and the exercise of suo motu revisional power at the instance of the assessee was not justified in law.

Issue (ii): Whether the assessee was entitled to retain the refunded amount of Rs. 3.70 crores collected towards Central sales tax?

Analysis: The amount had been collected from customers as Central sales tax and refunded only on the basis of an order held to be illegal and without jurisdiction. The exemption under the State notification was confined to the State sales tax regime and did not extend to Central sales tax. In view of the later authoritative pronouncement rejecting the assessee's claim to such exemption, retention of the refunded sum would amount to unjust enrichment. Since the burden had been passed on to customers and the amount represented public revenue, the assessee could not retain it.

Conclusion: The assessee was not entitled to retain the refunded amount, and the claim to keep the sum was rejected.

Final Conclusion: The impugned revisional and confirming orders were set aside, and the assessee was directed to restore the refunded sales tax amount with interest, the State succeeding on the substantive issues.

Ratio Decidendi: A statutory suo motu revisional power intended to protect revenue cannot be invoked at an assessee's instance, and money refunded pursuant to an order later found to be illegal cannot be retained when the tax burden had already been passed on.

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