Refund of excess trade tax follows once assessment is set aside, even without an express appellate refund direction.

Refund of excess trade tax is treated as mandatory under the U.P. Trade Tax Act where the underlying assessment is set aside, and an express refund direction in the appellate order is not a prerequisite. The statutory refund scheme and restitution principles require repayment of excess collections, subject to the doctrine of unjust enrichment, and delayed refund attracts statutory interest. The note also records that the claimant must establish that the disputed sums were actually deposited on its behalf for the relevant assessment years; contemporaneous challans and correspondence may suffice, while any amount already refunded or credited elsewhere cannot be counted again.

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Issues: (i) Whether tax deposited in pursuance of an assessment order, later set aside in appeal, can be refunded even in the absence of an express refund direction in the appellate order; (ii) Whether the petitioner had established deposit of the disputed sums for the relevant assessment years so as to claim refund with interest.

Issue (i): Whether tax deposited in pursuance of an assessment order, later set aside in appeal, can be refunded even in the absence of an express refund direction in the appellate order.

Analysis: Refund under section 29 of the U. P. Trade Tax Act, 1948 is mandatory where tax or other dues have been paid in excess of the amount due. The procedural rules do not require a separate express order directing refund before the assessing authority can act, and the appellate power to direct refund is consequential to the setting aside of the tax liability. The statutory scheme, read with the refund rules, obliges the authority to refund excess collections, and the principle of restitution applies once the assessment is annulled. The claim remains subject to the doctrine of unjust enrichment.

Conclusion: The excess tax was refundable even without an express refund direction in the appellate order, and the petitioner was entitled to the statutory interest on delayed refund.

Issue (ii): Whether the petitioner had established deposit of the disputed sums for the relevant assessment years so as to claim refund with interest.

Analysis: The record showed that the disputed sums were deducted from the petitioner's sale consideration and deposited with the tax authorities on its behalf. The department's objection that the deposits related to a different assessment year was rejected on the basis of the contemporaneous correspondence and the challans. The Court, however, preserved revenue protection by clarifying that if the amounts had already been refunded or credited to the finance company, they would not again be treated as deposits on behalf of the petitioner.

Conclusion: The petitioner proved entitlement to refund of the disputed deposits with interest at 18% per annum under section 29(2) of the Act.

Final Conclusion: The writ petition succeeded, the impugned refusal to refund was quashed, and the respondents were directed to refund the excess tax with interest within the stipulated time.

Ratio Decidendi: Where excess tax has been realised and the underlying assessment is set aside, refund follows from the statutory duty to refund excess collections, and an express refund direction in the appellate order is not a prerequisite for enforcement of that entitlement.

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