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Issues: (i) Whether section 25-A of the Bihar Finance Act, 1981 and the actions taken under it were liable to be struck down as ultra vires; (ii) whether the petitioner was entitled to interest on the amounts collected under the impugned provision and to consequential refund or adjustment.
Issue (i): Whether section 25-A of the Bihar Finance Act, 1981 and the actions taken under it were liable to be struck down as ultra vires.
Analysis: The writ petition was treated as covered by an earlier decision in which section 25-A of the Bihar Finance Act, 1981 and related provisions had already been declared ultra vires. Once the impugned provision stood invalidated, any action taken solely under that provision could not survive in law.
Conclusion: The impugned provision was held to be ultra vires, and all actions taken under it were held to be bad in law.
Issue (ii): Whether the petitioner was entitled to interest on the amounts collected under the impugned provision and to consequential refund or adjustment.
Analysis: In view of the interim order earlier passed in the matter, and because no comparable stay had been granted against the petitioner, the Court considered it to award interest on the amounts collected under the invalid provision. The Court fixed the rate of interest at 10 per cent per annum and also directed that refund or adjustment be made on application within the stipulated time.
Conclusion: The petitioner was held entitled to interest at 10 per cent per annum, with refund or adjustment to follow on application.
Final Conclusion: The writ petition succeeded in full, the levy-related action under the impugned provision was invalidated, and consequential monetary relief was granted to the petitioner.
Ratio Decidendi: Once a tax provision is declared ultra vires, all actions taken solely under it are unenforceable, and consequential restitutionary relief including interest may be granted where the circumstances justify it.
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