Refund versus forfeiture turns on whether tax was collected from customers before denying repayment of non-taxable goods tax.

Where refund of tax paid on goods later found non-taxable depends on whether the tax was collected from customers, the authority must first determine that factual issue before denying refund or treating the amount as forfeited. The revisional authority accepted that no tax was leviable on pulses and mustard oil, but refused refund on forfeiture grounds. An earlier direction required fresh examination of customer collection, ledger entries, and whether payment came from the petitioner's own funds, with refund if no collection was proved and forfeiture only if collection was established. The matter was therefore remitted for reconsideration in accordance with law.

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Issues: Whether the petitioner's claim for refund of tax paid on items later treated as non-taxable had to be reconsidered in the light of the earlier order directing a fresh examination and possible forfeiture proceedings.

Analysis: The petitioner had paid tax on pulses and mustard oil, and the revisional authority accepted that no tax was leviable on those items, but declined refund on the view that the amount stood forfeited. The record also showed an earlier order directing the assessing authority to examine whether tax had in fact been collected from customers, whether there were ledger entries, and whether the payment had been made from the petitioner's own funds, with refund to follow if no collection from customers was found and forfeiture to follow only if tax had been collected. In this background, the writ court directed the tax authorities to reconsider the petitioner's case consistently with the earlier order and to pass a fresh order in accordance with law.

Conclusion: The petitioner succeeded to the extent that the refund claim was not finally rejected and the matter was remitted for reconsideration.

Final Conclusion: The dispute on refund versus forfeiture was kept open for fresh decision by the tax authorities in accordance with the earlier directions and applicable rules.

Ratio Decidendi: Where entitlement to refund depends on whether tax was collected from customers, the authority must determine that question before denying refund or treating the amount as forfeited.

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