Retrospective tax reduction on arecanut did not permit refund where the notification clearly barred tax already paid.

A retrospective reduction in the tax rate on arecanut did not permit refund of tax already paid where the notification expressly barred such refund. The Kerala High Court treated the clause covering tax "already collected" and the separate clause covering tax "already paid" as distinct, and refused to read the word "collected" into the refund prohibition. Because sales tax liability arises on taxable turnover and not on collection from purchasers, the fact that the dealers had not collected tax did not change the effect of the clear notification. The refusal of refund was upheld.

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Issues: Whether the last paragraph of Notification S.R.O. No. 127 of 2000 barred refund of tax already paid by dealers, even when such tax was not collected from purchasers, and whether the assessees were entitled to refund of the excess tax paid pursuant to the retrospective reduction in rate.

Analysis: The notification granted retrospective reduction in the rate of tax on arecanut but expressly provided that tax, if any, already collected at the higher rate shall be paid over to Government and tax, if any, already paid shall not be refunded. The Court held that these are two distinct situations, one dealing with collected tax and the other with tax already paid, and that the latter clause cannot be restricted by reading into it the word "collected" from the first clause. Since liability to pay sales tax arises on the taxable turnover and does not depend upon collection from customers, the fact that the assessees were purchase-point dealers and had not collected tax did not alter the effect of the prohibition against refund. In construing a taxing notification, the Court applied the ordinary meaning of the language used and declined to add words or invoke equity where the wording was clear and unambiguous.

Conclusion: The assessees were not entitled to refund of the tax already paid, and the clarification issued by the Commissioner denying such refund was upheld.

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