Waiver condition cannot defeat refund where the underlying turnover is not taxable and tax was never validly due.

A waiver notification cannot validly deny relief or refund by conditioning it on non-collection of tax where the underlying turnover was not taxable. The controlling principle is that, if the transaction itself falls outside sales tax liability, the State cannot retain remitted tax or refuse refund merely because tax had been collected and paid. On that basis, the condition in the notification was treated as unsustainable for the relevant assessment period, and refund of the remittance was recoverable. The discussion also applies the prior principle governing supply of food and drinks in hotels to reinforce that non-taxable turnover cannot be burdened indirectly through a refund restriction.

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Issues: Whether the assessee was entitled to waiver and refund of tax collected and remitted for the assessment year 1977-78 despite the condition in the waiver notification restricting relief where tax had been collected.

Analysis: The dispute turned on the effect of the waiver notifications and the prior decision governing supply of food and drinks in hotels. The controlling principle applied was that where the turnover itself was not liable to sales tax, the State could not deny relief by imposing a condition linked to collection of tax. Since the assessment year in question fell within the period when there was no sales tax liability on such transactions, the condition in the notification was unsustainable and the assessee's remittance was recoverable by way of refund.

Conclusion: The assessee was entitled to the waiver relief and refund, and the Revenue's challenge failed.

Final Conclusion: The order of the Special Tribunal was confirmed and the writ petition was dismissed.

Ratio Decidendi: Where the underlying transaction is not taxable, a waiver condition tied to non-collection of tax cannot defeat refund or relief, because no tax can be validly imposed or retained on a non-taxable turnover.

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